Multiple choice

Seigniorage is concerned with which of the following?

  1. Taking debt from public

  2. Increase in revenue by increasing the tax rates

  3. Earning profit by government by issuing currency

  4. Controlling non-developmental expenses

  5. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

 
 
Yes, Seigniorage is the profit earned by the government by issuing currency. It is the profit earned on the difference between face value of currency and its production cost. For instance, if the cost of production of a ten rupee coin is 50 paisa and its face value is Rs 10, then a profit of Rs 9.50 is earned on it.

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