WBCS.LIVE practice question

"Gresham's Law" in economics relates to which of the following?

Solve this multiple-choice question and check the correct answer with its explanation below.

Answer options

  1. Taxation
  2. Supply and Demand
  3. Circulation of Currency
  4. International Trade

Correct answer and explanation

Correct answer: Circulation of Currency

Explanation: āœ… Correct Answer: C) Circulation of Currency šŸ“š Explanation: Gresham's Law is a monetary principle which states that "bad money drives out good money" from circulation. If there are two types of money in circulation that are accepted as having the same face value but different intrinsic values, the one with higher intrinsic value (good money) will be hoarded or exported. Consequently, only the money with lower intrinsic value (bad money) remains in daily use.