💥Join UPSC 2027,2028 Mentorship (June Batch) + Access XFactor Notes & Microthemes PDF
Talk to Mentor

Civilsdaily

Login

The term “Gresham’s Law” is often mentioned in the context of economics. What does it state

,

The term “Gresham’s Law” is often mentioned in the context of economics. What does it state?

(a)

Bad money drives out good money when both are in circulation.

(b)

Good money drives out bad money when both are in circulation.

(c)

Inflation drives out deflation in the economy.

(d)

Market competition drives out inefficient producers.

Answer:

(a)

Core Books/NCERT

Explanation

Gresham’s Law states that bad money drives out good money when both are in circulation, as people tend to hoard the good money and use the bad money for transactions.