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← Bad Money Drives Out Good
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Question
What does Gresham's Law predict when two currencies of the same face value but different intrinsic worth circulate simultaneously?
1
The government will be forced to withdraw the less valuable currency to maintain stability
2
The more valuable currency will eventually replace the less valuable one
3
Citizens will hoard the more valuable currency and spend the less valuable one, driving good money out of circulation
4
Markets will spontaneously equalise the purchasing power of both currencies within weeks
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