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Money illusion highlights the common misconception that people perceive currency based on its nominal value rather than its real purchasing power. This fallacy is significant because modern fiat currencies lack intrinsic value, relying instead on their usability for transactions and tax payments. The concept was introduced by John Maynard Keynes, and Irving Fisher's work, "The Money Illusion," remains a foundational text exploring this economic phenomenon.
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The Money Illusion, Irving Fisher
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- 2009
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