In Which of the Following Situations Are People Experiencing Money

question 24

Multiple Choice

In which of the following situations are people experiencing money illusion?

• A) when prices rise 5% while incomes remain unchanged and thus people think their real incomes have not changed.
• B) when prices remain unchanged and incomes remain unchanged and thus people think their real incomes have not changed.
• C) when prices rise 5% and incomes rise 5% and people think that their real incomes have risen 5%.
• D) when prices rise 5% while incomes rise 8% and people think that their real incomes have risen 3%.

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