The term seigniorage refers to
A)the conversion of paper money to a valuable commodity
B)clipping
C)revenue earned from the power to coin money
D)fiat money
E)none of the above

Question

Quizplus · Accepted Answer

Seigniorage refers to the revenue earned by the government from the power to coin money. It is essentially the difference between the cost of producing a currency and its face value. For example, if it costs the government 5 cents to produce a coin that has a face value of $1, then the government earns a seigniorage of 95 cents on each coin.

The Term Seigniorage Refers to