How could the Bank of Canada decrease the money supply?

Question

Quizplus · Accepted Answer

The Bank of Canada can decrease the money supply by increasing the bank rate, which would make it more expensive for banks to borrow money from the central bank. This would lead to a decrease in the amount of money that banks have available to lend to customers, which in turn would decrease the money supply. Buying government bonds (choice A) would actually increase the money supply, as it would inject more money into the economy. Decreasing the bank rate (choice B) and decreasing the reserve requirement (choice C) would both also increase the money supply, as they would make it easier for banks to borrow money and lend it out.

How Could the Bank of Canada Decrease the Money Supply