In this video I explain the reserve requirement, the money multiplier, and how money is created. This document explains the relationship between reserve requirements, money supply, and the money multiplier in banking.∆M = 100 1−(1− f) = 100 f = 1000. Complete the table below demonstrating your knowledge of bank reserves and the power of the money multiplier. Week Eight Individual Assignments. Calculate the money supply, the currency deposit ratio, the excess reserve ratio, and the money multiplier. b. The money multiplier tells us how many dollars worth of deposits are created with each additional dollar of reserves. Write the equation that helps us to understand how changes in the monetary base affect the money supply.