What is the primary aim of restrictive monetary policy?

The primary aim of restrictive monetary policy is to control rising prices and overexpansion. This approach involves reducing the money supply or increasing interest rates, making borrowing more expensive. By doing so, it helps to curb excessive spending and investment that can lead to inflation. When the economy is growing too quickly and prices begin to rise sharply, restrictive monetary policy acts as a brake, helping to stabilize the economy by preventing overheating.

In contrast, other options focus on contrasting goals. Increasing the money supply or encouraging borrowing would typically be associated with an expansionary monetary policy aimed at stimulating economic growth, rather than restricting it. Similarly, stimulating economic growth is not the focus of restrictive monetary policy; instead, it seeks to achieve stability in the economy by addressing inflationary pressures. Thus, option C accurately captures the essence of restrictive monetary policy's objectives.