Q1. “Gresham’s Law” in Economics relates to
(a) Supply and demand
(b) Circulation of currency
(c) Consumption and supply
(d) Distribution of goods and services
(UPSC Prelims 1979)
Answer: (b) Circulation of currency
Explanation: Gresham’s Law states that “bad money drives out good” in circulation. When two forms of currency are accepted, the less valuable (bad) currency tends to be used more, while the more valuable (good) currency is hoarded or removed from circulation.
Q2. Yuan is the currency of
(a) China
(b) Japan
(c) Indonesia
(d) Burma
(UPSC Prelims 1985)
Answer: (a) China
Explanation: Yuan is the official currency of China, also known as the Renminbi (RMB). It is issued by the People’s Bank of China and plays a central role in the country’s economic transactions and global trade.