Velocity in the Country of Aquilonia Is Always Stable

Multiple Choice

Velocity in the country of Aquilonia is always stable. In 2018, the money supply was $100 billion, nominal GDP was $500 billion, and the real interest rate was 3 percent. In 2019, the money supply was $105 billion, and real GDP did not change from its level in 2018. What was the approximate nominal interest rate in 2019?

A) 3 percent
B) 5 percent
C) 8 percent
D) 11 percent