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Consider the exchange rate between the Saudi riyal and the euro. Suppose the Saudi government and the Eurozone governments agree to fix the exchange rate at 2.5 riyal per euro, as shown by the grey line on the following graph Refer to the following graph when answering the questions that follow 3.5 Supply of Euros 2 3.0 2.5 2.0 1.5 O 1.0 Demand for Euros 0.5 10 2 16 QUANTITY OF EUROS (Billions)

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