The correct answer is B.
If aiming to reduce inflation, the Federal reserve needs to decrease the money supply, which means reducing the amount of money in circulation in the economy. This is denominated a contractionary monetary policy.
If the money supplied decreases, the cost of borrowing (the cost of money) increases due to its increased relative scarcity. This, in turn, discourages borrowing, and produces a lower income, and a drop in demand, production, and employment. Therefore, it causes the economy to shrink as mentioned in the question.
<u>As spending drops, so do prices and therefore inflation. </u>
Such a strategy is only implemented when there are inflationary preassures, as it also brings important side effects in terms of output.
Answer:
Kapu
Explanation:
The Kapu system was a forbidden act practiced by the Hawaiians. They used this system as a set of laws that regulated the dos and donts of Hawaiians. At the time, there were a lot of Kapu, which were greatly affecting every aspect of life. Any act or behavior or even item that Hawaiians termed kapu were seen as sacred or forbidden, thus if one was to break the rule, the punishment was death unless you can find refuge at the pi'uhonua. One of such kapu was men and women eating together.
