Seigniorage Is

question 49

Multiple Choice

Seigniorage is

• A) when a country abandons its currency altogether and adopts that of another country.
• B) when a country loses the revenue that it received by issuing money.
• C) when the par exchange rate is reset at a lower level.
• D) when the domestic currency is backed 100% by a foreign currency.

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Definitions:

Conversion Costs

The sum of labor and overhead costs that are incurred to convert raw materials into finished products.

Weighted-Average Method

A cost accounting method that averages the costs of goods available for sale or production, weighting by the quantities at each cost.

Materials Cost

The total expense incurred by a company for raw materials and supplies needed to manufacture products.

Weighted-Average Method

A method for valuing inventory that figures out the cost of goods sold and the end inventory value by averaging the cost of all items available for sale over the period.