According to Gresham's Law,when two kinds of money are in circulation (such as $1 gold coins and $1 silver coins),the preferred--or more highly valued--form of money will tend to predominate,driving the "bad" money out of circulation.

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Gresham's Law states that "bad" money (less valued) will drive "good" money (more valued) out of circulation, as people tend to hoard the more valuable currency and spend the less valuable one.

According to Gresham's Law,when Two Kinds of Money Are in Circulation