Author Question: Money illusion is A) when people think they are better off when their income increases even ... (Read 35 times)

newyorker26 · **on:** Jun 30, 2018

Money illusion is

A) when people think they are better off when their income increases even though prices have increased by the same amount.
B) when people are motivated by self-interest.
C) could not exist if the economy did not have competitive markets.
D) a basic condition that all classical economists assume people have.

Question 2

When interest rates rise,

A) borrowing costs decline, and total planned real expenditures decline.
B) borrowing costs increase and total planned real expenditures increase.
C) borrowing costs decline, and total planned real expenditures increase.
D) borrowing costs increase, and total planned real expenditures decline.