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Gresham's Law States That When Different Forms of Commodity Money

Question 21

Multiple Choice

Gresham's Law states that when different forms of commodity money circulate simultaneously (e.g.,$1 gold coins and $1 silver coins) ,


A) the one with the more intrinsic ("commodity") value will disappear from circulation
B) the one with the lesser intrinsic ("commodity") value will disappear from circulation
C) both will eventually have to be withdrawn from circulation by the government
D) the resultant disruption in the money markets will cause inflation
E) the resultant disruption in the money markets will cause a recession

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