“Expansionary and Contractionary Policy.” Board of Governors of the Federal Reserve System. "Policy Tools-Open Market Operations." Federal Reserve Bank of New York. "Open Market ...

One of the tools used by central banks is open market operations; the buying and selling of securities. A contractionary policy will involve selling securities to banks, thereby reducing their ...

Contractionary monetary policy consists of ... and purchasing assets in open market transactions. This results in increased money supply, more spending, and higher economic production.