Given nominal money growth, the amount of seignorage will be greater when:
A) foreign lending is higher.
B) the inflation rate is higher.
C) real money balances are larger.
D) interest rates are higher.
E) tax revenues are higher.

Question

Quizplus · Accepted Answer

Seignorage is the revenue generated from printing money. It is greater when real money balances are larger because the government can issue more money without causing excessive inflation, thus generating more revenue.

Given Nominal Money Growth, the Amount of Seignorage Will Be