In 2004 GDP in the USA was $11 876 billion dollars and in 2005 it was $12 718 billion dollars. The monetary base was $759 billion in 2004 and $787 billion in 2005.

(a) Calculate the velocity of the monetary base in 2004 and 2005.

(b) Calculate seignorage relative to GDP in 2005.

(c) Calculate what seignorage would have been if velocity had remained unchanged between 2004 and 2005.

(d) Explain the difference between the results in (b) and (c).

Hi, if you are using formulas, please explain the formula, and what is seignorage mean in economics ?