How does the purchasing power of money relate to the price level?

Basically, there is an inverse relationship between the
price level and the purchasing power of money.  The higher the price level (all other
things being equal) the lower the purchasing power of
money.

The reason for this is that the price level in an
economy refers to a measure of the price of all goods and services in that economy. 
When the price level rises, things are more expensive.  When things get to be more
expensive, each dollar (in the US) is worth less.  This is because each dollar cannot
buy as many goods and services as it once could.

Overall,
then, the purchasing power of money is inversely related to the price level in the
economy.