  We characterize how suspensions of magnetic particles in a liquid respond to
a magnetic field in terms of the effective magnetic susceptibility $\chi_{eff}$
using inductance measurements. We test a model that predicts how $\chi_{eff}$
varies due to demagnetization, as a function of sample aspect ratio, particle
packing fraction, and particle aspect ratio. For spherical particles or
cylindrical particles aligned with external magnetic field, the model can be
fitted to the measured data with agreement within 17\%. However, we find that
the random alignment of particles relative to the magnetic field plays a role,
reducing $\chi_{eff}$ by a factor of 3 in some cases, which is not accounted
for in models yet. While suspensions are predicted to have $\chi_{eff}$ that
approach the particle material susceptibility in the limit of large particle
aspect ratio, instead we find a much smaller particle aspect ratio where
$\chi_{eff}$ is maximized. A prediction that $\chi_{eff}$ approaches the bulk
material susceptibility in the limit of the packing fraction of the
liquid-solid transition also fails. We find $\chi_{eff}$ no larger than about 4
for suspensions of iron particles.
