Seignorage is defined as which of the following?
A) The increase in income tax revenues that occurs during a hyperinflation.
B) The part of a budget deficit financed by the issuance of bonds sold to the private sector.
C) The part of a budget deficit financed with foreign lending.
D) Revenue from money creation.
E) The increase in income tax revenues that occurs as a result of nominal income tax brackets not being adjusted to changes during a hyperinflation.

Question

Quizplus · Accepted Answer

Seignorage refers to the revenue or profit earned by the government through the creation of money. It is basically the difference between the cost of producing money and the face value of the money. Therefore, the correct option is D which describes revenue from money creation.

Seignorage Is Defined as Which of the Following