Definition of money illusion in English:

money illusion

Line breaks: money il¦lu|sion

noun

[mass noun] Economics
Belief that money has a fixed value in terms of its purchasing power, so that, for example, changes in prices represent real gains and losses.
More example sentences
  • Ignoring the effects of this productivity growth is akin to money illusion in periods of inflation.
  • The implications of wage stickiness and the possibility of a money illusion have been discussed at least since Keynes.
  • While deflation is in place, the money illusion will cause profits to be overstated, as in Japan today, which moderates the level of bankruptcies.

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