Question: Consider the supply-demand framework (S: current supply / D; current demand) for the British pound relative to the U.S. dollar shown in the following chart.

Consider the supply-demand framework (S: current supply / D; current demand) for the British pound relative to the U.S. dollar shown in the following chart. The exchange rate is currently $1.80 E1.00. 1) if the exchange rate is fixed, how will the equilibrium be achieved? 2) if the exchange rate is floating, how will the equilibrium be achieved? Provide your explanation for the both cases, and indicate the locations for the equilibriums. ( 5 points)

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