Final answer:
The positive effect of contractionary policy leading to slow growth is that it can decrease inflation by raising interest rates, thereby tempering investment and consumption, and aligning actual output with potential GDP.
Step-by-step explanation:
The positive effect of slow growth stemming from a contractionary policy is that it can help to decrease inflation. When the central bank enacts a contractionary policy, it reduces the supply of money and credit in the economy, which in turn increases interest rates. This increase makes borrowing more expensive and less attractive, leading to reduced investment and consumption, ultimately shifting aggregate demand to the left. Here, the goal is to mitigate overheating in the economy, which is when the output exceeds the potential GDP, by tempering the rise in the price level and aligning output with potential GDP. This realignment prevents the harmful effects of high inflation such as eroding the purchasing power of money and causing the distortions in the allocation of resources.