Contractionary Monetary Policy : Decrease in Money Supply :: Expansionary Monetary Policy : ?

Contractionary monetary policy is when a country's central bank decides to reduce the money supply in the economy. This is often done to control inflation, which is when prices rise too quickly. By decreasing the money supply, it becomes more expensive to borrow money, leading to less spending and investment by businesses and consumers. On the other hand, expansionary monetary policy is the opposite; it involves increasing the money supply to encourage more spending and investment. For example, if a central bank lowers interest rates, it becomes cheaper for people to take out loans, which can help boost the economy.