From the course: Economic Tips for Everyone

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What is seigniorage?

What is seigniorage?

From the course: Economic Tips for Everyone

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What is seigniorage?

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- When countries print money, they receive goods or services in exchange. But sometimes, other countries or people, hold onto the money and they don't spend it. This is where countries that print money actually can turn a profit. It's called seigniorage. On the one hand, there's the cost to print bills and mint coins, but there's also the face value of those bills and coins. Seigniorage is the value of the produced money minus the physical cost to produce them. And the value of seigniorage is usually highest for reserve currencies that people and countries hold onto and don't spend.

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