Who gave the concept of 'money illusion' for the first time?

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SSC CHSL Exam 2023 Tier-I Official Paper (Held On: 03 Aug, 2023 Shift 1)
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  1. Robertson
  2. Adam Smith
  3. Irving Fisher
  4. JM Keynes

Answer (Detailed Solution Below)

Option 3 : Irving Fisher
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SSC CHSL Exam 2023 Tier-I Official Paper (Held On: 02 Aug 2023 Shift 1)
100 Qs. 200 Marks 60 Mins

Detailed Solution

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The correct answer is Irving Fisher.Key Points

  • Irving Fisher gave the concept of 'money illusion' for the first time.
  • Money illusion refers to the tendency of people to think in nominal terms rather than real terms.
  • For example, if a person's salary increases by 3% but inflation is also 3%, they may think they have received a raise when in reality their purchasing power has not changed.

Additional Information

  • Adam Smith is known for his work on economics.
    • He is often referred to as the father of modern economics. 
  • JM Keynes was a renowned economist.
    • He is known for his theories on macroeconomics and the role of government in managing the economy.
  • Robertson was an economist who contributed to the development of monetary theory. 

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