Gresham's Law means - (1) Good money replaces bad money in circulation (2) Bad money replaces good money in circulation (3) Good money promotes bad money in the system (4) Bad money promotes good money in the system
(2) Bad money replaces good money in circulation Explanation: Gresham's law is an economic principle that states: "When a government compulsorily overvalues one type of money and undervalues another, the under-valued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation."