In a simplified system where all banks have uniform reserve requirements and checkable deposits are the only form of money, the money multiplier is equal to 1 over the required reserve ratio.

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This is known as the simple deposit multiplier formula, which states that the maximum amount of money that can be created by banks through the lending process is equal to the initial deposit multiplied by the money multiplier. In this simplified system, the money multiplier is equal to 1 divided by the required reserve ratio, meaning that as the required reserve ratio decreases, the money multiplier increases and more money can be created by banks.

In a Simplified System Where All Banks Have Uniform Reserve