Discuss these questions among yourselves and try to agree on answers!

1.When the price level goes up

a.the purchasing power of your cash goes down

b.the purchasing power of your cash goes up

c.nothing changes, a $20 is still a $20

d. it depends on whether you are a classical economist or not

2. If you entered the "nightmare world" of the high price level, your demand for money

a.would be high, because its purchasing power was low

b. would be high, because its purchasing power was high

c. would be low because its purchasing power was high

d. would be low, because its purchasing power was low

3. Comparing the nightmare world (High prices) with the Fantasy world (low prices) we saw that

a. prices make no difference--money is neutral

b. the price level and the purchasing power of money go in oppositedirections

c. you need the same amount of money in eitherscenario

d. this is the basis for the supply of moneycurve