What is Gresham’s Law?

Gresham’s Law, (also known as the Gresham-Copernicus Law) is the principle which states that “bad money drives out good”. For instance, if there are two coins in circulation, one that made from 95% gold and the other made from 15% gold, and both have the same face value, the 95% gold coin will eventually disappear from circulation.

 

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