In economics, money illusion, or price illusion, refers to the tendency of people to think of currency in nominal, rather than real, terms. In other words, the numerical/face value (nominal value) of money is mistaken for its purchasing power (real value) at a previous point in the general price level (in the past). This is false, as modern fiat c...
Found on
http://en.wikipedia.org/wiki/Money_illusion
'the belief that money [that is, a particular currency] represents a constant value' Source: Hayek, 1978, Ch 3 Contexts: money
Found on
http://www.econterms.com/glossary.cgi?query=money+illusion
May occur where people confuse changes in nominal balances with changes in real balances.
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http://www.encyclo.co.uk/local/20140
No exact match found.
