How does contractionary monetary policy typically impact unemployment rates in an economy experiencing high inflation?

Contractionary monetary policy is when a central bank, like the Federal Reserve, decides to reduce the money supply in the economy. This usually happens by raising interest rates, which makes borrowing more expensive and encourages people to save rather than spend. As a result, businesses may slow down their production because fewer people are buying their goods, leading to less hiring or even layoffs. In an economy with high inflation, this policy aims to control rising prices, but it can also cause unemployment to increase as companies adjust to lower demand. For example, if a restaurant sees fewer customers due to higher prices, it might have to cut staff, leading to higher unemployment in that area.