Economic Misconceptions

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August 25, 2024 3 min read Definitions
Money Illusion: The Misunderstanding of Purchasing Power
Economics Behavioral Economics Money Illusion Purchasing Power Inflation Cognitive Bias Economic Misconceptions
Money Illusion refers to the cognitive bias where individuals mistakenly believe that an increase in their nominal income equates to an increase in their real purchasing power, neglecting the effect of inflation.
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