B) 2percent lower
Explanation:
Nominal interest rate = Real interest rate + inflation rate
Inflation rate = Nominal interest rate- real interest rate.
For Germany:
Given
Nominal rate = 3%
Real interest rate= 2%
Inflation rate = 3%-2%
Inflation rate for Germany = 1%
For United State:
Nominal interest rate = 5%
Real interest rate = 2% (same as for Germany)
Inflation rate = 5%-2%
Inflation rate for US = 3%.
The inflation rate in US is therefore 2% higher than that of Germany OR the inflation rate in Germany is about 2% lower than that of the United States.