Question

what is gresham's law?​

Answer 1

Answer: 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").

Answer 2

When the price of a currency in terms of another currency is arbitrarily fixed by lawmakers, it leads to a shortage in the supply of the currency that is undervalued, while there is at the same time an over supply of the currency that is overvalued. This law is usually expressed as “ bad money drives out good money”.

The economics of price, which predicts price ceilings and price floors to result in supply shortages and surpluses respectively, this applies to currencies as much as it does to goods.