The Term Contractionary Monetary Policy refers to: An Overall Decrease in the level of prices in an economy over time The tendency for wealthy people in poor countries to invest their capital abroad instead of at home The conjecture that poor countries will remain poor since they do not have sufficient resources available to make the investments in capital which are necessary for economic growth. A Decrease in the Money Supply which dampens overall economic activity resulting in lower levels of output, employment and incomes in the short term (but greater stability in the long term)