9. The relationships between demand and supply of the Olympics Dollar and the exchange rate with the Terranian Credit are given by the following functions: E = 8.75 0.030: E = 0.0255 3.50 where: E = Exchange rate: = price of Olympics dollar (T erranian credits I Olympics dollars) index of demand tor Olympics dollar index of supply of Olympics dollar. 0: S: a) i) Determine the exchange rate that w0uid prevail under a clean float. ii) Explain what this exchange rate would mean for the balance of payments of Olympics. [3 marks] b) The government of Olympics elects instead to fix the exchange rate with the Terranian credit at 5:15 credits per dollar. t) Describe what actions the central bank will need to take in the short run to maintain this exchange rate. and the state of the balance of payments. ii) Explain what measures would be required it the government wishes to maintain this exchange rate in the long run. [7 marks] ['l'otal: 10 marks]