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Money illusion
Description
The tendency of people to think of currency in nominal, rather than real, terms.
Money illusion in business decision
Employees might feel satisfied with a 2% raise in a year with 3% inflation, even though their real purchasing power has decreased, because their nominal income increased.
Money illusion in personal life decision
Receiving a 2% salary increase makes you feel richer even though inflation is 3%, and your purchasing power has decreased.