Suppose you come into possession of two "silver" dollars, one minted in the 1950s which contains a lot of silver, the other minted in the 1990s which contains no silver at all. The legal exchange rate between the coins is fixed at one for one. According to Gresham's law, the 1950s silver dollar:
A) will drive out of circulation the 1980s silver dollar.
B) is less likely to be used as a store of value because it will appear old fashioned.
C) is more likely to be used as a medium of exchange.
D) is less likely to be used as a medium of exchange.
E) is considered "bad" money.
Correct Answer:
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