Gresham's Law

Definitions

Banking

  • noun
    (written as Gresham’s Law)
    the law that ‘bad money will drive out good’: where two forms of money with the same denomination exist in the same market, the form with the higher metal value will be driven out of circulation because people hoard it and use the lower-rated form to spend (as when paper money and coins of the same denomination exist in the same market)

Economics

  • noun the law that bad money will drive out good. Where two forms of money with the same denomination exist in the same market, the form with the higher metal value will be driven out of circulation when people hoard it and use the lower-rated form to spend (as when paper money and coins of the same denomination exist in the same market).
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