Gresham's Law for Dummies
noun
What does Gresham's Law really mean?
Gresham's Law is a concept named after an Englishman named Sir Thomas Gresham, who was an advisor to Queen Elizabeth I back in the sixteenth century. Now, imagine you have a lot of money in your pocket, but some of it is really old and worn out. Meanwhile, there are other coins that are brand new and shiny. It turns out that when you go to spend your money, people are more likely to accept the new and shiny coins instead of the old and worn-out ones. In fact, they might even refuse to accept the old coins altogether!
So, Gresham's Law basically says that when two kinds of money are in circulation at the same time, people tend to hoard or hide away the good money and only use the bad money for transactions. It's like if you had a bag of cookies and you knew that some of them were really delicious and some were just stale and tasteless. Chances are you would eat the delicious cookies first and save the stale ones for later, or maybe even throw them away. The same thing happens with money.
Now, this Law doesn't only apply to money, but it can also be used to describe other situations where people tend to choose the easiest or most convenient option and leave the more difficult or less desirable option behind. For example, let's say you're a student and you have two homework assignments to complete. One is really easy and will only take you a few minutes, while the other is much harder and will require a lot of effort and time. If you're like most people, you'll probably prioritize the easy assignment and put off the harder one until later, or maybe even forget about it altogether!
In a nutshell, Gresham's Law is all about how people naturally prefer to hold on to or use the "good" things, whether it's money, cookies, or homework assignments, and leave the "bad" things behind. It's a principle that explains why certain types of money or other things tend to disappear from circulation over time. So remember, when you come across Gresham's Law, just think about those old coins and stale cookies that people prefer to keep hidden away!
Revised and Fact checked by Michael Miller on 2023-10-28 14:00:56
Gresham's Law In a sentece
Learn how to use Gresham's Law inside a sentece
- Imagine you have a bowl filled with colorful, yummy candies. Some of the candies are fresh and have a delicious taste, while others are old and have a weird taste. Because the fresh candies are so good, everyone wants to have them, so they quickly disappear from the bowl. On the other hand, the not-so-tasty old candies are left behind because no one wants them. This is like Gresham's Law in action!
- Let's say you have a collection of trading cards. Some of the cards are very rare and valuable, while others are common and not worth much. If you want to trade your cards with someone else, you would naturally want to keep the valuable ones for yourself and give away the less valuable ones. This happens because people tend to hold onto (keep) the good cards and get rid of (give away) the less desirable ones. This is similar to what happens with Gresham's Law.
- Think about a classroom where some students bring brand new, sharpened pencils, while others bring dull, old pencils. The teacher allows students to swap pencils with each other. Most students will want to trade their dull pencils for the sharp ones because they are better for writing. As a result, the dull pencils will be left untraded, and the sharp pencils will be quickly exchanged. This is like Gresham's Law at play.
- Imagine you have a box of chocolates. Some of the chocolates have a creamy, delicious filling, while others have a strange taste or an unpleasant filling. When you offer the box to your friends, they will naturally choose the yummy chocolates first and leave behind the not-so-tasty ones. This is a simple example of Gresham's Law.
- Let's say you have a collection of toys. Some of the toys are brand new and exciting, while others are old and broken. If you were to put all your toys in one big box and let your friends pick the ones they want to play with, they will naturally choose the new and fun toys first and leave behind the old and broken ones. This is similar to how Gresham's Law works.
Gresham's Law Hypernyms
Words that are more generic than the original word.
Gresham's Law Category
The domain category to which the original word belongs.