TeachMeFinance.com - explain Gresham's law
Gresham's law -- This is not an enactment but a law of
political economy as expounded by Sir Thomas Gresham, a
former master of the British mint. It is that where there are
two forms of money the inferior or depreciated tends to
drive the other from circulation owing to the hoarding and
exportation of the better form. As commonly stated, bad
money drives out good.
Gresham's words were : "When two sorts of coin are current
in the same nation, of like value by denomination, but not
intrinsically, that which has the least value will be current and
the other as much as possible will be hoarded."
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