43. Which of the following is true about the long-run aggregate supply curve (LRAS)?

A. The LRAS shows the potential output of an economy. B. The LRAS shows the relationship between savings and capital formation. C. The LRAS shows the relationship between price and demand. D. The LRAS shows the potential surplus earned by a consumer. E. The LRAS shows the relationship between unemployment and inflation.

44. A much larger number of international students from Europe are planning to study in the United States. Which of the following statements concerning foreign exchange is true?

A. The demand for euros will increase. B. The demand for U.S. dollars will increase. C. The money spent in travel and educational expenses does not affect the demand or supply of foreign exchange in the foreign exchange market. D. The supply of euros will decrease. E. The supply of U.S. dollars will decrease.

46. Use the graph to answer the question that follows.

Nominal Interest Rate, r MD' MD Quantity of Money ($)