The
Definition Of

Gresham law

Sir Thomas popularly known as Gresham was the master of mint, during Queen Elizabeth the 1st.

Statement of the law:”Bad money derives good money out of circulation” - Gresham.

 

Queen Elizabeth-1 has issued now gold coin with same monetary value along with the old money circulated during her father’s rule. But there has been a growing phenomenon that the now coins have been driven out of the market and the old coin was in circulation. Queen Elizabeth appointed Gresham to find out the reason. He found that the now gold coin despite pervading the same monetary value alike the old coin but was heavier than the old coins because of clipping. Thus people found old coins profitable using them for monetary purpose and the new coins profitable for use in non-monetary purpose.

Because being new coin is heavier their Monetary value< Non Monetary Value if used as commodity.

Share it:

More from this Section

  • Documents against acceptance (D/A)
    Documents against acceptance (D/A) is the exporter draws a term bill on the overseas buyer and lodges it, together with shipping
  • Product Mix
    Product Mix is the composite of products offered for sale by an organization.
  • Noninterest margin
    Noninterest margin is the spread between noninterest income and noninterest expenses of a bank, divided by its total assets or total earning assets.
  • SWOT
    SWOT is acronym for Strengths, Weakness, Opportunities and Threats; an approach to formulating firm strategy via assessment of a firm’s
  • Call
    In banking call means a demand for payment under a loan or guarantee.
  • Active portfolio strategy
    Active portfolio strategy is a strategy that uses available information and forecasting techniques to seek better performance than
  • Holder in Due Course
    Holder in Due Course is a holder who takes a bill, complete and regular on the face of it, under the following conditions: