Answer: The correct answer is "it would be blue shifted".
Explanation:
Red shift: The light changes when the object in space moves away from us then the light is shifted to red end. In this case, the light is shifted to longer wavelength which is red. It is more common as most objects in the universe are moving from us.
Blue shift: The light changes when the object in space moves towards from us then the light is shifted to blue end. In this case, the light is shifted to shorter wavelength which is blue. It is created by shrinking the space.
In the given problem, if the Universe were contracting then the light from the other galaxies as it reached Earth. It would be blue shifted as the universe is contracting.
Therefore, the correct option is (C).