Your Professor Showed You an Internet Video of the Chair

Multiple Choice

Your professor showed you an Internet video of the chair of the Federal Reserve Bank speaking to the American public.The message he is conveying indicates that Fed economists are worried about inflation and believe the best course of action would be to slow the economy.Which of the following policies is the Fed most likely to pursue?

A) Increase taxes.
B) Decrease interest rates.
C) Restrict the money supply and increase interest rates.
D) Devalue the dollar on international currency exchanges.