Contractionary Monetary Policy <Back to Last Page>     <Full Glossary>

Definition of Contractionary Monetary Policy: Contractionary monetary policy is a government policy of raising interest rates charged by the central bank.

In the language of some first courses in macroeconomics, it shifts the LM curve (liquidity/money curve) to the left. (Econterms)

Terms related to Contractionary Monetary Policy:

• Central bank

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