Final answer:
Overly stringent monetary policies are generally designed to control inflation but can end up stifling economic growth by reducing aggregate demand and increasing interest rates.
Step-by-step explanation:
The question involves understanding the impact of monetary policy on economic growth. Overly stringent or contractionary monetary policies, which reduce the quantity of money and credit and increase interest rates, typically aim to control inflation. However, by decreasing the aggregate demand, such policies can stifle economic growth. This is aligned with the neoclassical model of economics, which posits that potential GDP is determined by real economic factors, not by aggregate demand influenced by expansionary or contractionary monetary policies. Milton Friedman's views, as discussed, advocate for a steady rate of monetary growth to match the real economy growth, and to prevent monetary policy from becoming a source of economic disturbance.