Which of the Following Statements Accurately Reflects the Money Illusion

question 84

Multiple Choice

Which of the following statements accurately reflects the money illusion?

• A)Consumers care only about relative prices, not money prices.
• B)Pure inflation does not change the budget constraint.
• C)A change in money prices changes the indifference curves.
• D)Money has no intrinsic value and therefore is essentially worthless.

---

Definitions:

Binocular Depth Perception

The ability to perceive the world in three dimensions (3D) and to judge the distance of objects, using visual cues derived from the two eyes working together.

Subjective Colour Mixing

The phenomenon of perceiving new colors when different wavelengths of light are combined in the eye, rather than physically mixed.

Ambiguous Figures

Visual images that can be perceived in more than one way, illustrating how perception can shift between multiple interpretations.

Visual Illusions

Perceptual anomalies where the observed images differ from the actual reality, often revealing how the human brain processes information.