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A contractionary policy is a type of policy that is used as a macroeconomic tool by the country's central bank or finance ministry to slow down an economy. Contractionary policies are enacted by a government to reduce the money supply and ultimately the spending in a country. This is done primarily through: 1. Increasing interest rates 2. Increasing reserve requirements 3. Reducing the money supply, directly or indirectly This tool is used during high-growth periods of the business cycle, but does not have an immediate effect. Read more: Contractionary Policy Definition | Investopedia http://www.investopedia.com/terms/c/contractionary-policy.asp#ixzz4CEHanoFN Follow us: Investopedia on Facebook
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The range of contraction policy is to concentrate efforts on a weaker number of products. The objectives are essentially the reductiuon of costs.
Thanks for the invitation, I agree with all answers
Thank you for invitation, experts already explained well
It does reduce the size of money supply or it dies increase it slowly and it also raises the interest rate.
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I will leave this question to the experts answer.
Thank you very much!
It is a process by which the monetary authority of a nation controls the money supply to ensure price stability and general trust in the currency
It refers to as either being expansionary (increasing the total supply rapidly in an economy rapidly) or contractionary (increasing the money supply slowly in an economy).
Thank you Mr. Nadjib Rabahi. I will wait for the experts answer first.
Agree with expert ansewrs above
