Examples of Money Illusion. What do the following two quotes have in common? a. “My wages are going up 5 percent a year. If only inflation weren’t 5 percent a year, I would be rich.” b. “My bank is...

Examples of Money Illusion. What do the following two quotes have in common?

a. “My wages are going up 5 percent a year. If only inflation weren’t 5 percent a year, I would be rich.”

b. “My bank is paying 10 percent a year, but the 8 percent inflation rate is just eating up all my real investment gains.”