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Briefly discuss the theory of liquidity preference.
Substitution Effect
The change in quantity demanded of a good that results from a change in price, making the good more or less costly relative to other goods.
Retirement Period
The phase in an individual's life post their active working years, during which they are typically supported by savings, pensions, or social security.
Work Period
The duration of time during which an individual is actively engaged in their job or tasks assigned by an employer.
Interest Rate
The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan balance.
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