Suppose different forms of commodity money, such as $1 coins in both gold and silver, are circulating simultaneously.What does Gresham's law state will happen?

Question

Quizplus · Accepted Answer

Gresham's law states that "bad money drives out good." In other words, if two forms of commodity money are in circulation simultaneously and one is perceived as having more intrinsic value than the other, the one with more intrinsic value (the "good" money) will tend to disappear from circulation. People tend to hoard or collect the more valuable form and spend the less valuable one.

Suppose Different Forms of Commodity Money, Such as $1 Coins