Liquidity preference

[Hina Muqadas]

noun; the tendency for the public to want to hold income in cash relative to its willingness to hold it as interest-bearing savings (bonds).
The liquidity preference is analogous to a supply curve for lendable funds. If the price for lendable funds--that is to say, the interest rate--is high, then the amount be be large. If the interest rate is low, then the public will be more inclined to [hoard] income as cash.
Income held as cash is not spent on goods and services, so if the amount increases abruptly then there will be a [recession]. If it is held in some interest-bearing form, then it can be spent on [fixed capital], thereby increasing output and employment.
During a recession, if the liquidity preference is high, a lot of money is going to be held as cash. One could [free up] some cash for job-creating investment by raising interest rates, but that would [eradicate] a lot of business opportunities. So monetary authorities [monetize] debt instead, creating a new supply of credit to replace the savings lost by falling interest rates.

[Couch Potatoe]

the fact that people, for example people who are making investments, prefer to have cash, or assets that can be quickly exchanged for cash: