why is the slow growth that can result from a contractionary policy a positive effect?\nit can increase loan…

Brief Explanations:

Contractionary policy aims to slow down economic growth. When economic growth is slowed, the demand for goods and services decreases. With less demand, the upward pressure on prices (inflation) is reduced. Increasing loan interest rates and decreasing available credit are tools of contractionary policy, not positive effects in the context of the question. Increasing the money supply is the opposite of what contractionary policy does.

Answer:

It can decrease inflation.