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GIVE some detailed explanation Suppose you are central bank governor of a country which is experiencing ination of 100% per month. You have two economic

GIVE some detailed explanation

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Suppose you are central bank governor of a country which is experiencing ination of 100% per month. You have two economic advisors. One advisor tells you that in order to increase seignorage you ought to raise the money growth rate. The other advisor tells you that in order to increase seignorage you ought to reduce the money growth rate. (a) Explain the concept of seignorage, both in words and formally (e.g. alge braically). (5 points) (1)) Which of the two recommendations is correct? Why? (Hint: look up the concept of the \"Laffer curve\" and use it to answer this question.) (5 points) (c) Read the recent article from the Economist entitled \"The digital currencies that matter\". How do you think the wide adoption of govcoz'ns is going to affect governments' seignorage revenue? (5 points)

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