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Discuss the prototype model.
Interest Rate
The rate, calculated as a percentage of the principal, which a lender requires a borrower to pay for borrowing assets.
Money Market
A segment of the financial market in which financial instruments with high liquidity and very short maturities are traded.
Excess Supply
A market condition where the quantity of a good supplied exceeds the quantity demanded at a given price, leading to surpluses.
Liquidity Preference Theory
A theory suggesting that investors demand higher yields on long-term securities as compensation for the increased risk of holding them longer.
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