Gresham's Law is the tendency for low-quality money to drive high-quality money out of circulation.

Question

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Gresham's Law states that when two forms of currency with the same face value but different intrinsic values are in use, the form with the lower intrinsic value will circulate more widely than the form with the higher intrinsic value. This happens because people hoard the high-quality money and spend the low-quality money. Over time, the high-quality money disappears from circulation, leaving only the low-quality money.

Gresham's Law Is the Tendency for Low-Quality Money to Drive