What is the status of the world in which we live? Is the empirical world real? If so, is it conditioned by itself or by some other transcendental level? In the present paper all these questions will be examined through one of the most well-known schools of Indian philosophy, the advaita vedānta. The advaita vedānta is not only the most known but also the most representative system of Indian tradition and the Indian way of thinking. In every system of philosophy it is extremally difficult to answer our starting questions, and it is almost impossible to resolve such problems - but in an idealistic, monistic system the situation becomes much more complicated. And so it is with advaita vedānta.