What is the goal of contractionary monetary policy in the mid '90s?

The goal of contractionary monetary policy in the mid-'90s was primarily to prevent inflation. This type of policy involves measures taken by a central bank, such as raising interest rates or reducing the money supply, to curb excessive growth in the economy that can lead to rising prices.

During periods of high inflation, central banks aim to stabilize prices as inflation can erode purchasing power and create uncertainty in the economy. By increasing interest rates, borrowing becomes more expensive, which can slow down consumer spending and investment. This ultimately helps to bring inflation under control, maintaining the purchasing power of the currency and leading to a more stable economic environment.

Expanding on the context, while some might think that increasing unemployment or stimulating growth could be secondary effects or related goals, the main intention of contractionary monetary policy is specifically to manage inflationary pressures. Reducing taxation, while a fiscal policy tool, does not directly relate to the goals of monetary policy; contractionary monetary policy is focused on the supply and demand of money, rather than tax levels.