Gresham's law and of the rate of inflation lower the real demand for the inflating money." The principles of Gresham's law can sometimes be applied to different fields of study. Gresham's law may be generally applied to any circumstance in which the true value of something is markedly different from the value people are required to accept, due to factors such as lack of information or governmental decree. In the market for used cars, lemon automobiles (analogous to bad currency) will drive out the good cars. The problem is one of asymmetry of information. Sellers have a strong financial incentive to pass
Bad (economics) Bad (economics) An economic bad is the opposite of an economic good. A 'bad' is anything with a negative value to the consumer, or a negative price in the marketplace. Refuse is an example of a bad. A bad is a physical object that lowers a consumer's level of happiness, or stated alternately, a bad is an object whose consumption or presence lowers the utility of the consumer. With normal goods, a two-party transaction results in the exchange of money for some object, as when money is exchanged for a car. With a bad, however, both money and the object