The correct answer is C) falsely accusing many people of being communists.
Stating false accusations about people and their ties to communism became known as McCarthyism. Joe McCarthy, during the 1950's, became famous for declaring that he had a list of over 200 people in the State Department that were part of the communist party or tied to the Soviet Union. This prompted a second Red Scare in the US.
McCarthy used several different tactics to cause paranoia in the US, including calling in hundreds of people into the House Un-American Activities Committee to be questioned by him and the other members of the US Congress.