________ is the profit made by the government from issuing fiat money.

Question

Quizplus · Accepted Answer

Seigniorage refers to the difference between the cost of producing currency and the monetary value of that currency. When a government issues fiat money, it essentially creates value out of nothing, and the difference between the cost of producing that money and the value it represents is the seigniorage. Therefore, A is the correct answer. The liquidity premium refers to the extra return that investors require in order to hold an asset that cannot be quickly or easily traded. Circulation revenue and currency commission are not terms commonly used to describe the profit made by a government from issuing fiat money.

________ Is the Profit Made by the Government from Issuing