Question

explain Gresham’s Law in economics. Relating to coins, how might Gresham’s Law be applied to the COvid crise response by corporations with “exact chang-only policies".

Answer 1

Answer- Gresham's law-

In Economics, Gresham's law is a monetary principle stating that " Bad money drives out good"

Example- If there are two forms of commodity money in circulation, which are accepted by law as having face value,the more valuable commodity will gradually disappear from circulation.

The law was named in 1860 by Henry Dunning Macleod.

1- Under Gresham's law,"Good money" is money that shows little difference between it's nominal value

1- The face value of the coin- Commodity value.

2- The value of the metal of which is made,oftem precious metals,nickel or copper.

Relating to coins,how might law be applied to the covid crises response in with exact change- policies.

1. Gresham's law and the Covid - 19 pandemic

- Gresham's law holds that bad money drives out good money . If there are two coins with the same face value,but of different intrinsic value .

Assume that one is made of a more precious metal

- The coin with less intrinsic worth (bad coin) will be used for currency transactions and the more valuable coin will go out of circulation.

This law applies to the pharmaceuticals today.

If there are two drugs of comparable efficacy,the drugs that costs mpre ( bad coin) will drive out the good drug

( less expensive) out of the market.

2- It is unfortunate that we are experiencing this in the midst of the humanitarian tragedy of the Covid pandemic.

3- The present pandemic is caused by a novel virus,one approach is to re- purpose approved drugs developed for other uses .

4- A variety of drugs in the market can be tested for efficacy against the new virus.

5- Stress during an infectious disease outbreak can sometimes cause the following

1- Changes in sleep or eating patterns.

2- Difficult sleeping or concentrating.

3- Worsening of chronic health problems.

4- Increased use of tobacco and/or alcohol and other substances.