Suppose the price level reflects the number of dollars needed to buy a basket of goods containing one cup of coffee, one donut, and one newspaper. In year one, the basket costs $8.00.

In year two, the price of the same basket is $7.00. From year one to year two, there is_________at an annual rate of_____ .

In year one, $40.00 will buy _____ baskets, and in year two, $40.00 will buy_____baskets.

This example illustrates that, as the price level falls, the value of money_________.