If two kinds of money are circulating at the same time,
A)one of them must be commodity money
B)one of them must be fiat money
C)one of them must be paper money
D)the poorer quality one will be offered by purchasers of goods and the better one will be hoarded
E)the better quality one will be offered by purchasers of goods and the poorer one will be hoarded

Question

Quizplus · Accepted Answer

This is an example of Gresham's Law, which states that "bad money drives out good." People tend to spend the money that is perceived to be of lesser value and hoard the money that is perceived to be of greater value.

If Two Kinds of Money Are Circulating at the Same