7. During the 1800's, due to a shortage of coinage, the US economy used both US...

Transcribed Image Text:

7. During the 1800's, due to a shortage of coinage, the US economy used both US and Spanish minted coins. As it happens, Spanish silver dollars contained from 2% to 5% more silver than the US ones did, yet had the same accepted nominal value in trade - one dollar. Interestingly, fractional Spanish silver coins - things like half dollars, quarters, and dimes – contained less silver than their US counterparts. Using Gresham's law, what do you think happened to the types of coins that eventually circulated in the US? 7. During the 1800's, due to a shortage of coinage, the US economy used both US and Spanish minted coins. As it happens, Spanish silver dollars contained from 2% to 5% more silver than the US ones did, yet had the same accepted nominal value in trade - one dollar. Interestingly, fractional Spanish silver coins - things like half dollars, quarters, and dimes – contained less silver than their US counterparts. Using Gresham's law, what do you think happened to the types of coins that eventually circulated in the US?

Answer rating: 100% (QA)

Greshams law is an economical tenet that states that people will inherently choose to hang onto the ... View the full answer