When the Bank of Canada decreases the money supply, what do we expect to happen to interest rates and stock prices?

Question

Quizplus · Accepted Answer

When the Bank of Canada decreases the money supply, interest rates are likely to rise because there is less money available to lend out, making borrowing more expensive. This can lead to a decrease in stock prices because higher interest rates can lead to decreased consumer and business spending, potentially reducing company profits and investor confidence in the market.

When the Bank of Canada Decreases the Money Supply, What