What effect would a combination of an open market sale by the Bank of Canada and an increase in the bank rate have on the money supply?

Question

Quizplus · Accepted Answer

An open market sale by the Bank of Canada involves selling government securities in the open market. This reduces the supply of money in the economy. An increase in the bank rate means that it is more expensive for banks to borrow money from the central bank. This reduces the amount of money available for lending and decreases the money supply. Therefore, the combination of these two actions would lead to a decrease in the money supply.

What Effect Would a Combination of an Open Market Sale