Money Illusion Is

question 237

Multiple Choice

Money illusion is

• A) a basic condition that all classical economists assume people have.
• B) when people think they are better off when their income increases even though prices have increased by the same amount.
• C) when people are motivated by self-interest.
• D) could not exist if the economy did not have competitive markets.

---

Definitions:

Mean

The average of a set of numbers, calculated by adding them together and dividing by the number of quantities in the set.

SRS

Simple Random Sample; a method of sampling where every individual has an equal chance of being selected.

Relative Risk

A measure that compares the risk of a certain event occurring in two different groups.

Standard Error

A statistic that measures the accuracy with which a sample distribution represents a population by using standard deviation.