Gresham's Law is an economic principle stating that "bad money drives out good money." This means that when two forms of currency are in circulation, the one perceived as less valuable (bad money) will be used more frequently, while the more valuable currency (good money) is hoarded or saved. The law is named after Sir Thomas Gresham, a 16th-century English financier. It often applies to situations where people prefer to spend the currency that is less stable or has a lower intrinsic value, leading to a decline in the use of higher-quality money in everyday transactions.