Author Question: Under Gresham's law, the term bad money refers to: a. money with no face value. b. illegal tender. ... (Read 107 times)

cool · **on:** Jun 30, 2018

Under Gresham's law, the term bad money refers to:
a. money with no face value.
b. illegal tender.
c. devalued money.
d. commodity money.
e. money with low commodity value.

Question 2

As the price of DVD players has fallen over the last two years, more DVD players have been sold by consumer electronics firms. Is this a violation of the law of supply?

millet · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

e

Answer to Question 2

No. Very likely the reduction in price is due to an increase in supply (not an increase in quantity supplied). As DVD technology has progressed, DVD players have become standardized and more efficiently mass-produced, leading to an increase in supply. What has likely been observed is a rightward shift of the supply curve, not a movement along the supply curve.