Meaning of the word "a cap" in English

What does "a cap" mean in English? Explore the meaning, pronunciation, and specific usage of this word with Lingoland.

a cap

US /ə ˈkæp/
UK /ə ˈkæp/

Phrase

a limit on the amount of money that can be spent or borrowed, or on the amount of money that a government, company, or organization is allowed to spend in a particular period of time

Example:
The government has imposed a cap on local council spending.
There's a cap on how much you can borrow.