The Currency of Camelot Is the Noble

question 50

Multiple Choice

The currency of Camelot is the noble.King Arthur orders the minting of a ten-noble gold coin,but it costs only seven nobles to mine and process the amount of gold in the coin.Which of the following statements is true?

• A)Individuals outside the government will have an incentive to melt down the coin and use its contents,rather than its face value,in exchange.
• B)King Arthur has an incentive to melt down the coin and use its contents,rather than its face value,in exchange.
• C)The government loses seigniorage every time it spends new coins.
• D)The government earns seigniorage every time it spends new coins.
• E)The people of Camelot gain seigniorage on every private transaction.

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Definitions:

Drawings

Withdrawals made by the owner of a business from the company's earnings or assets for personal use.

Net Income

The total profit of a company after all expenses and taxes have been subtracted from revenues.

Consulting Revenues

Income earned by a company for providing professional advice or services to other organizations or individuals.

Expenses

The economic costs that a business incurs through its operations to earn revenue.