Final answer:
If the money supply increases, the interest rate is likely to decrease.
Step-by-step explanation:
If the initial equilibrium interest rate was 5 percent and the money supply increased by $50 million, the new interest rate would depend on the impact of the increase in money supply on the money market. An increase in the money supply, assuming other factors remain constant, would lead to a decrease in interest rates. This is because the increased money supply would lead to an excess supply of money in the market, and lenders would be willing to offer lower interest rates to entice borrowers. Therefore, the new interest rate would likely be lower than 5 percent.