Which of the following statements correctly describes how the federal reserve can reduce inflation?
A. the federal reserve can reduce the money supply, which reduces the cost of capital and cost of borrowing, which reduces demand for goods and services, leading to reduced inflation rates
B. the federal reserve can reduce the money supply, which increases the cost of capital and cost of borrowing, which increases demand for goods and services, leading to reduced inflation rates
C. the federal reserve can reduce the money supply, which increases the cost of capital and cost of borrowing, which reduces demand for goods and services, leading to reduced inflation rates
D. the federal reserve can increase the money supply, which increases the cost of capital and cost of borrowing, which reduces demand for goods and services, leading to reduced inflation rates