Restrict the money supply and increase interest rates policies is the Fed most likely to pursue.
Option: A
Explanation:
The Fed economists are tensed about inflation and according to them the best practice can be done in such scenario is to slow the economy by pursuing the reduction is the money supply and hiking the rate of interest.
By investing less money in the market this strategy will keep public in hold to grab the policies and by increasing interest rate will control the inflation by utilizing less resources then earlier the public use to. A rise in the money disbursement works both by reducing interest value, which stimulate investment and by placing more monetary into the hands of customers, making them practice more comfortablity and increasing expenditure.
