Which of the following is false?
A)The Fed earns seigniorage when it issues currency by purchasing government securities that earn interest.
B)If electronic payments reduce the amount of currency used in the future, the amount of seigniorage will be reduced.
C)Countries that dollarize increase the amount of seigniorage that they earn.
D)A cost of dollarization is that a country gives up control over its own monetary policy.

Question

Quizplus · Accepted Answer

Countries that dollarize actually decrease the amount of seigniorage they earn, as they are using a foreign currency rather than their own.

Which of the Following Is False