The term seigniorage refers to the
A) governance structure of the Bank of Canada.
B) hierarchal relationship between the Department of Finance and the Bank of Canada.
C) Bank of Canada's open-market purchases or sales.
D) profit gained from the issue of paper money or coins.
E) difference between the key policy rate and the overnight rate target.

Question

Quizplus · Accepted Answer

Seigniorage refers to the profit gained from the difference between the face value of money issued (such as paper money or coins) and the cost of producing that money. In other words, it is the revenue earned by the government or central bank from creating and circulating currency.

The Term Seigniorage Refers to the