Money illusion is the belief in rational expectations.

Question

Quizplus · Accepted Answer

Money illusion refers to the tendency of people to think of currency in nominal, rather than real, terms. In other words, they are fooled by the amount of money rather than what that money can actually purchase, ignoring the effects of inflation. This concept contrasts with rational expectations, which assume that individuals make predictions about the future based on all available information, including the potential impact of inflation on purchasing power.

Money Illusion Is the Belief in Rational Expectations