How many goods will china gain in seigniorage

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Reference no: EM131316519

Suppose that Japan (country a) and China (country b) do not have foreigncurrency controls in effect. The total demand for money is always 2,000 goods in Japanand 1,000 goods in China. The fiat money supplies are 100 yen in Japan and 300 RMB in China. (b) Suppose the exchange rate is 3 and China triples its fiat money stock, whereasJapan prints no new money. How many goods will China gain in seigniorage?What fraction of this seigniorage comes from Japanese citizens?

Reference no: EM131316519

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