24. Suppose an economy has two types of money — gold and silver coins — that are both legal tender but have different non-monetary values. Gresham's law has come into effect when the value of the coins is in the same ratio as their non-monetary values. people refuse to use the coins of lesser value. people use the higher-valued coins for exchange and the lower-valued for savings. the lower-valued coin is taken out of circulation. the higher-valued coin is taken out of circulation.

In gresham's law more value money will gradually disappear from circulation. Here we are having…

Answered: 24. Suppose an economy has two types of…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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24. Suppose an economy has two types of money — gold and silver coins — that are both legal tender but have different non-monetary values. Gresham's law has come into effect when

		the value of the coins is in the same ratio as their non-monetary values.
		people refuse to use the coins of lesser value.
		people use the higher-valued coins for exchange and the lower-valued for savings.
		the lower-valued coin is taken out of circulation.
		the higher-valued coin is taken out of circulation.

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