It depends on the monetary system.

If you think about physical cash and coins, some get lost or destroyed.

In a fractional reserve system, the money supply shrinks whenever debts are paid back or deposits are withdrawn. This is because banks lend in excess of how much their customers have deposited, essentially issuing IOUs that are treated like real money. Paying back a loan reduces the amount of outstanding IOUs and withdrawing deposits reduces the amount of IOUs that can be issued.

Bitcoin is most like the physical system. We have lost coins and dust that reduce the money supply.