The central banking system of the United States, the Federal Reserve, uses an interest rate target. Suppose the Federal Reserve maintains a 4% interest rate target. The world real interest rate is constant at 1.75%. Use the monetary model to answer the following questions. What is the expected inflation rate in the United States in the long run? 5.75% o 4% o 2.25% 1.75% 3% Suppose the Federal Reserve adopts a policy that requires it to maintain an inflation rate no higher than 2%, which of the following interest rate targets would achieve this objective? Check all that apply. 4.25% 5.25% 3.25% 2.75%