The tendency for money of lower intrinsic value to circulate more freely than money of higher intrinsic and equal nominal value (often expressed as ‘Bad money drives out good’).
- There is a Gresham's law of culture as well as of money: the bad drives out the good, unless the good is defended.
- A final and vital flaw in a market-basket dollar is that Gresham's law would result in perpetual shortages and surpluses of different commodities within the market basket.
- The remedy was to implement a de jure gold standard so as to free England from the effects of Gresham's law and to keep token silver coins in circulation.
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