While enacting contractionary monetary policy central bank
decreases money supply, hence decrease consumer spending and thus
aggregate demand curve shifts to the left. While enacting
expansionary monetary policy opposite of the above is achieved to
shift the aggregate demand curve to the right by increasing money
supply in the economy.
But it should be kept in mind that central banks do not
manipulate the money supply at their will, however, they do it
whenever economy needs it. In other words, whenever a need arises
according to the economic situation central banks decrease or
increase money supply.