Check out example codes for "contextual typing in typescript". It will help you in understanding the concepts better.

Code Example 1

Lets say you defined a call signature for any function.

type greet = (name: string) => void 

Now, when you declare any function having this type, like this

const sayHello: greet = (name) =>{
  console.log("hello ", name);

you dont need to explicitly annotate funciton paramters and return type,
  this is called "CONTEXTUAL TYPING".

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