Explain Gresham's Law
When there are two forms of money available, people prefer to spend the form of money that is less valuable. Thereby giving rise to the phrase "Cheap money drives out dear money." For instance if there is paper money and silver coins, it is more likely that individuals will hoard the silver coins hoping that the value of them will increase. In this instance the paper money is the cheap money.
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One method that lenders use to mitigate the adverse selection problem is to
A) charge higher interest rates to less creditworthy borrowers. B) monitor closely the behavior of borrowers after a loan is made. C) ration credit. D) provide default insurance.
The determinants of labor supply include:
A. culture and other opportunities. B. supply of other factors and output prices. C. culture and technology. D. other opportunities and technology.
Economic theory suggests that the standard of living of American workers would rise if
a. technological setbacks lowered output per worker hour, increasing the number of jobs. b. the minimum wage were doubled. c. older workers were forced to retire earlier, opening up jobs for younger workers. d. the knowledge and skills of workers improved
Historically, when a diverse set of stocks is held over a lengthy time period, stocks have yielded a ______ rate of return and the variation in the rate of return has been _______. (Fill in the blanks)
A) low; high B) high; high C) high; low D) low; low