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Use the theory of liquidity preference to explain how a decrease in the money supply affects the aggregate-demand curve

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The liquidity preference theory suggests that a fall in the supply of money will cause the money supply curve to swing to the left, increasing the equilibrium interest rate. An increase in this rate will translate into a drop in consumption and investment.

What is an investment?

The dedication of an asset to achieve an increase in value over time is referred to as an investment. Investment necessitates the sacrifice of a current asset, such as time, money, or effort. The goal of investing in finance is to generate a return on the invested asset.

Income investing is an investment strategy that focuses on constructing an investment portfolio that is specifically designed to generate regular income. The income investing strategy's sole goal is to generate a consistent stream of income.

The type of investor you are and how you should make investments are determined by your investing personality. Your investing personality is essentially your financial risk profile, which considers factors such as age, financial history, circumstances, and investment goals.

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