Money Illusion

The money illusion, also known as price illusion, is the human tendency to view money in terms of its face value, rather than by its purchasing power. As a facet of economics, purchasing power varies by many variables such as location, supply and demand, time (past or present), etc. This illusion tends to blind people to the actual nature of currency and economics. This point of view turns money into a way of keeping score in life, i.e. the wealthier I am, the better a person I am. But, we all have the heard the truism, "Money can't happiness," meaning that money is only a commodity and can't buy real happiness.

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