Economic Definition of contractionary monetary policy. Defined.
Offline Version: PDF
Term contractionary monetary policy Definition: A form of stabilization policy consisting of a decrease in the amount of money in circulation (that is, the money supply). This policy is designed to avoid or correct the problems associated with a business-cycle expansion that gets out of hand and causes inflation.
« contractionary gap | contractionary policy »
Permalink: https://glossary.econguru.com/economic-term/contractionary+monetary+policy