Final answer:
A decrease in demand refers to a shift of the entire demand curve to the left, while a contraction of demand refers to a movement along the demand curve caused by a change in price.
Step-by-step explanation:
The terms 'decrease in demand' and 'contraction of demand' may seem similar, but they have different meanings in economics.
When we talk about a 'decrease in demand', we mean that the entire demand curve shifts to the left. This can happen due to various reasons such as a decrease in consumer income or a change in consumer preferences. For example, if there is a decrease in consumer income, people may buy fewer luxury goods, leading to a decrease in their demand.
On the other hand, a 'contraction of demand' refers to a movement along the demand curve caused by a change in price. When there is a change in price, it leads to a change in quantity demanded. For instance, if the price of a good increases, the quantity demanded will decrease along the same demand curve.
Here's a diagram to illustrate the difference: