Question: Panama adopted the U S dollar as its official paper money
Panama adopted the U.S. dollar as its official paper money in 1904. Currently, $400 million to $500 million in U.S. dollars is circulating in Panama. If interest rates on U.S. Treasury securities are 7%, what is the value of the seignorage that Panama is forgoing by using the U.S. dollar instead of its own-issue money?
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