What is the primary goal of contractionary monetary policy?

The primary goal of contractionary monetary policy is to reduce inflation, which is when prices for goods and services rise too quickly. When central banks, like the Federal Reserve in the United States, notice that inflation is getting too high, they may increase interest rates. Higher interest rates make borrowing money more expensive and encourage people to save rather than spend. This can slow down the economy because businesses may invest less and consumers might buy fewer things. For example, if the central bank raises interest rates, a family might decide to hold off on buying a new car because their loan would cost more, leading to lower overall spending in the economy.