Step 1: In a nuclear reactor, fission of uranium-235 releases fast neutrons carrying a lot of kinetic energy.
Step 2: Fast neutrons are not very good at causing further fission in uranium-235, they tend to pass by the nucleus too quickly to be captured. Slow, thermal energy neutrons are far more likely to cause fission and keep the chain reaction going steadily.
Step 3: A moderator, such as heavy water, ordinary water or graphite, is placed around the fuel so that fast neutrons collide with its light nuclei repeatedly and lose kinetic energy at each collision. After many collisions, the neutrons slow down to thermal speeds.
Step 4: This job is purely about speed, not about changing how many neutrons exist. Increasing or decreasing the actual number of neutrons is instead the job of control rods, made of neutron absorbing material like boron or cadmium, which are inserted or withdrawn to manage the neutron population.
Step 5: So the moderator's role is only to slow down the speed of neutrons, which is option C.