Suppose the price level reects the number of dollars needed to buy a basket of goods containing one can of soda, one bag of chips, and one comic book. In year one, the basket costs $10.00. In year two, the price of the same basket is $9.00. From year one to year two, there is V at an annual rate of V . In year one, $50.00 will buy V baskets, and in year two, $50.00 will buy V baskets. This example illustrates that, as the price level falls, the value of money V