Whenever new currency is put in circulation, does the government make money? In other words do the banks pay the government for the new bills. How do they figure how much currency to put out? What are the effects on inflation? Do other countries try to make money by printing out more currency?
Thanks
The US government makes money on currency. As you noted, the government does sell it to the banks.
According to the U.S. Treasury Department (Here) it costs roughly 2.5 cents per bill to make, so the government makes 97.5 cents per $1 bill issued ($99.975 per $100 bill, $49.975 per $50.00 bill, etc). It costs that 2.5 cents to make but the Federal Reserve System, banks, and all other customers pay face value for the bills. Approximately 95% of all bills produced are to replace worn bills, the rest are to cover increased demand.