Question : Which law states that bad money drives good money out of circulation?
Option 1: Wagner's law
Option 2: Grimm's law
Option 3: Gresham's law
Option 4: Keynes' law
Correct Answer: Gresham's law
Solution : The correct option is Gresham's law.
Gresham's law states that money of lower quality will eventually replace the higher value. It's a principle commonly invoked to explain situations involving two types of value circulating concurrently, one possessing greater intrinsic worth (good money) and the other of lesser value .
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