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• C)both will eventually have to be withdrawn from circulation by the government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