If individuals have money illusion then they
A. think that money is worthless.
B. ignore the effects on their income or wealth of some price changes in the economy.
C. they base their production and consumption decisions on relative rather than absolute prices.
D. Both B and C.
Answer:B
If individuals have money illusion then they
A. think that money is worthless. B. ignore the effects on their income or wealth of some price changes in the economy. C. they base their production and consumption decisions on relative rather than absolute prices. D. Both B and C.