Question : Which law of economics states, "Bad money drives out good money"?
Option 1: Baxter's Law
Option 2: Ohm's Law
Option 3: Gresham's Law
Option 4: Gauss's Law
Correct Answer: Gresham's Law
Solution : The correct option is Gresham's Law .
Gresham's law is an economic principle that states that bad money drives out good money. It is a monetary principle that can be applied to the currency markets. Good money means any currency or coin whose legal tender value and the value of the commodity do not differ much. Bad money means any currency or coin whose legal tender value and the value of a commodity have a huge difference.
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