Assume that in 2010, the long-run growth rate of real GDP of Colombia was 1.7%, that the velocity of money was constant (i.e. the growth rate of velocity = 0%), and that the inflation rate was initially at 1.0%. In addition, assume that the nominal interest rate in the economy was at 7.3%.

Now assume that in 2011, the central bank in Colombia has announced that it will set the growth rate of money supply at 3.5% (%M = 3.5%)

(c)What will be the nominal interest rate in Colombia in 2020 after the announced change in the growth rate of money supply?Assume that the classical dichotomy holds.