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(Table 1: Econia's Consumer Price Index and Salary Data, 2008

Question 35

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(Table 1: Econia's Consumer Price Index and Salary Data, 2008 and 2018) Table 1 provides data on Econia's Consumer Price Index (CPI) and average salaries for two years. Junko says that Econia's workers are twice as prosperous as they were before, but Marko disagrees. Who is suffering from the money illusion and why?  Table 2: Income and Consumer Price Index Data for Four Cities, 2008 and 2018 City A  City B  City C  City D 2008 average  income $40,000$70,000$85,000$100,0002008 CPI 120130901002018 average  income $65,000$100,000$160,000$160,0002018 CPI 150150160170\begin{array}{c}\text { Table 2: Income and Consumer Price Index Data for Four Cities, } 2008 \text { and } 2018\\\begin{array}{|c|c|c|c|c|}\hline \quad \quad \quad & \text { City A } \quad \quad \quad & \text { City B } \quad \quad \quad & \text { City C } \quad \quad \quad & \text { City D } \quad \quad \\\hline \begin{array}{c}2008 \text { average } \\\text { income }\end{array} & \$ 40,000 & \$ 70,000 & \$ 85,000 & \$ 100,000 \\\hline 2008 \text { CPI } & 120 & 130 & 90 & 100 \\\hline \begin{array}{c}2018 \text { average } \\\text { income }\end{array} & \$ 65,000 & \$ 100,000 & \$ 160,000 & \$ 160,000 \\\hline 2018 \text { CPI } & 150 & 150 & 160 & 170 \\\hline\end{array}\end{array}


A) Junko is suffering from the money illusion because she is considering only nominal values and not real values.
B) Junko is suffering from the money illusion because she should focus only on the CPI and not on salaries to make the determination.
C) Marko is suffering from the money illusion because he is focused only on the CPI and not on salaries.
D) Marko is suffering from the money illusion because he is considering real values rather than nominal values.

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