Which statement is true of digital legal tender? a. Digital legal tender replaces physical notes and coin. b. Digital legal tender issued into the economy will not save on costs associated with printing physical notes. c. Distributed ledger technology can enable the central banks to issue a secure, transparent and efficient digital legal tender. d. Digital legal tender is worth more than physical notes

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Loanable Funds Theory

The loanable funds theory is a neoclassical theory that determines the interest rate where the demand for loanable investments and supply of loanable funds intersect. To determine the interest rate, this theory employs linear regression and a demand curve. At the equilibrium point, demand for borrowings and demand for the issuance of borrowing funds are inextricably linked. This point of equilibrium should equalize demand and the supply of money available for borrowing.