The money multiplier describes how an initial deposit leads to a greater final increase in the total money supply. The multiplier effect is the relationship between the reserves in a bank and the money supply.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. Calculate the money supply, the currency deposit ratio, the excess reserve ratio, and the money multiplier. b. In this video I explain the reserve requirement, the money multiplier, and how money is created. True or False: The money multiplier will increase. True or False: As a result, the overall change in the money supply will remain unchanged. False This document covers an assignment on money creation, banking, and the Federal Reserve.