When a bank loan is repaid the supply of money

A) is constant,but its composition will have changed.
B) is decreased.
C) is increased.
D) may either increase or decrease.

When a bank loan is repaid, the money used to repay the loan is removed from circulation, effectively decreasing the money supply. This is because the repayment of the loan reduces the liabilities of the bank (the loan itself) and simultaneously reduces the assets of the borrower (the money used for repayment), which decreases the amount of money in the economy.