The General Theory of Employment, Interest and Money

Imagine you're planning a big party and need to decide whether to buy decorations now or save your money for a better deal later. You're also considering whether to keep some cash on hand for emergencies.

You prefer to have cash ready for unexpected costs or opportunities, even if it means missing out on possibly cheaper decorations later. This preference for liquidity, or the desire to have cash readily available, guides your spending and saving decisions.