Gresham's law India. Gresham's law states that any circulating currency consisting of both "good" and "bad" money (both forms required to be accepted at equal value under legal tender law) quickly becomes dominated by the "bad" money. This is because people spending money will hand over the "bad" coins rather than the "good" ones, keeping the "good" ones for themselves. Legal tender laws act as a form of price control. In such a case, the intrinsically less valuable money is preferred in exchange, because people prefer to save the intrinsically more valuable money. Consider a customer purchasing an item which costs five
Economic secession The exchange of goods and money creates the flow of energy within an economic system. "In society, initially innovation drives the changes and innovation creates the building blocks which allow the next stages of social and economic development." If individuals or companies decrease their spending on innovation, the energy into the economic system will decline. Economic secession withdraws capital that leads to innovation and economic prosperity in society. Economic secession Economic secession has been variously defined by sources. In its narrowest sense, it is abstention from the state’s economic system – for instance by replacing the use of government money