∆M = 100 1−(1− f) = 100 f = 1000. The multiplier effect is the relationship between the reserves in a bank and the money supply.Week Eight Individual Assignments. The money multiplier determines the limit of how much money a bank can create. Calculate the money supply, the currency deposit ratio, the excess reserve ratio, and the money multiplier. b. The money multipliers are the same because they equate changes in the money supply to changes in the monetary base times some multiplier. The multiplier effect refers to the proportional amount of increase, or decrease, in final income that results from an injection, or withdrawal, of capital. In monetary economics, the money multiplier is the ratio of the money supply to the monetary base (ie central bank money). Calculate the money supply, the money multiplier, and the monetary base.