how to specify the current directory when I start a shell in aquamacs

[n179911]

Hi,

I start aquamacs in a directory, say '~/dir1/dir2'
and then in aquamacs, i do 'M-x shell'

and it launches a shell, but why when I do 'pwd' in the shell, it goes
back to my HOME, i.e ~?

Is there anyway to configure aquamacs to start a shell when I do M-x
shell to the directory of  where I launched aquamacs?

In my above example, it would be ~/dir1/dir2?

Thank you.