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Money illusion

noun

Definitions

Noun
  1. 1
    The cognitive bias that leads people to think of money in nominal rather than real terms, mistaking its face value for its purchasing power at some point in time.

    "In respect to our present problem, while there is a great field for research, the only perturbing influence of transcendent importance is that of an unstable monetary standard, and, as was seen in Chapter II, even that would make nothing more than a nominal difference in the results if it were not for the “money illusion.”"

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