Answer: B. Americans did not believe Japan threatened them directly.
Prior to World War II, America had a foreign policy of non-intervention. This meant that they tended to act against a foreign power only when directly threatened.
In 1937, the Chinese and Japanese troops had a minor engagement in which aggression led them to engage in an undeclared war between the two countries. This was influential in the Japanese way of thinking that ultimately encouraged them to join the Axis. However, because the US did not believed Japan to be a direct threat, it did not take any action to address this aggression.
It would be the term "c. inflation" that refers to an economic situation where the large amount of money in circulation creates continuous pressure to raise prices, since the value of the money actually decreases.
