The two kinds of monetary policy are expansionary and contractionary. The monetary policy implemented with the objective of reducing the circulation of money throughout the economy is known as a contractionary kind of monetary policy. You can read about the Monetary Policy – Objectives, Role, Instruments in the given link.
Expansionary monetary policy is used when there is recession or economic slowdown.
- Monetary Policy Committee (MPC) – Structure, Objectives UPSC Notes
- Monetary System – Types of Monetary System