Gresham's Law is an economic principle that states that "bad money drives out good." In other words, if two forms of money are circulating in an economy, one of which is considered to be of higher value or quality than the other, people will hoard the good money and spend the bad money. As a result, the good money will disappear from circulation, leaving only the bad money.

The principle is named after Sir Thomas Gresham, an English financier who lived in the 16th century. Gresham observed that during the reign of Queen Elizabeth I, there were two types of coins in circulation: a high-quality coin with a high silver content, and a low-quality coin with a lower silver content. People began to hoard the high-quality coins, and used the low-quality coins for transactions. This led to a shortage of the high-quality coins in circulation.

Gresham's Law is still relevant today, and can be applied to various situations. For example, it can be seen in the case of counterfeit currency driving out genuine currency, or in the case of cheap, low-quality products outselling higher-quality products in a market.