If all banks are loaned up and so will not make further loans, a $1,000 deposit creates $1,000 in new money.

Creditors supply loans to sole proprietors at a high rate of interest because of:

a. their low profit expectancy from this business. b. frequent experience of loan default. c. their inability to call in their loans or sell them to others. d. their general risk-averse nature.

Shifts in aggregate demand affect the price level in

a. the short run but not in the long run. b. the long run but not in the short run. c. both the short and long run. d. neither the short nor long run.