In which situation are people experiencing money illusion?
A) Prices rise 5% while incomes remain unchanged and thus people think their real incomes have not changed.
B) Prices remain unchanged and incomes remain unchanged and thus people think their real incomes have not changed.
C) Prices rise 5% and incomes rise 5% and people think that their real incomes have risen 5%.
D) Prices rise 5% while incomes rise 8% and people think that their real incomes have risen 3%.
Correct Answer:
Verified
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