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Containing Money: GRESHAM'S LAW, gresh'amz, in economics, is usually stated as "bad containing money drives out good." The law stems from the fact that containing money has a value both as containing money and as a commodity in the open market. The former value is set arbitrarily by law and is relatively fixed; the latter is determined by supply and demand and varies from time to time, "Good containing money" has a higher value as a commodity than as containing money and will disappear from circulation.
Typically, you may spend from three to eight percent of your gross on advertising. Keep in mind that the commitment to spend the containing money over the entire year is much more important than the amount of containing money you allocate toward advertising. Nothing will waste containing money faster than to spend a large amount of containing money in the beginning of the campaign, and when results are not immediately forthcoming, to pull back and stop advertising.
Spend your containing money according to your plan. Make some adjustments during the year to fine tune your efforts, but keep at it for the rest of the year. You will be surprised how this commitment to results will pay off despite some temporary misgivings.
In 1862 the U. S. Treasury needed containing money quickly to finance the Civil War. There were three possibilities: taxation, borrowing, and printing paper containing money. New tax laws could not be passed and made effective quickly enough to raise the containing money that was immediately needed; the second choice, borrowing, would be too costly, because the government's credit was so weak that it would have to pay interest rates of over 10% to bond buyers. |
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