for if this level doubles, the purchasing power of the dollar is halved, and vice versa.
Figure 10 shows both. The upper curve shows the variations in the price level and the lower curve
Fig. 10. The Level of Prices of Commodities in Terms of Gold (Upper Curve) Contrasted with Its Reciprocal, the Purchasing Power of the Dollar in Terms of Commodities (Lower Curve) and with the Price of Gold (Middle Horizontal Line)
Since many commodities constitute a better standard of value than one commodity, the apparent fall and rise of commodities (upper curve) really means a rise and fall in gold (lower curve), while the mere constancy of the price of gold in terms of itself is shown by the middle (horizontal) line. The lower curve is the important one and, with others, is shown in the next diagram. Fig. 11.
shows the opposite variations in the purchasing power of the dollar. That is, the upper curve shows the changes of commodities expressed in terms of gold dollars and the lower curve shows the changes in the gold dollar expressed in terms of commodities; while the middle and horizontal line shows the constancy of the price of gold in terms of gold.
As the lower curve in Figure 10 shows, the purchasing power of the dollar over other things in general has fluctuated widely. If the war period were added,
