Jacob buys less soda when the price of soda rises 10 percent, while th
Jacob buys less soda when the price of soda rises 10 percent, while the prices of all other goods also rise 10 percent. Jacob is
A) behaving in accordance with classical economic theory.
B) worrying too much about a coming recession.
C) suffering from money illusion.
D) paying too much attention to changes in relative prices.
ANSWER
C
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