COTD: Money Illusion & The Regressive Inflation Tax

Posted on March 29, 2022 by macromon

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Money illusion is an economic theory positing that people have a tendency to view their wealth and income in nominal dollar terms, rather than in real terms. In other words, it is assumed that people do not take into account the level of inflation in an economy, wrongly believing that a dollar is worth the same as it was the prior year. – Investopedia 

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