The actual change in the money supply equals

Question

Quizplus · Accepted Answer

The change in excess reserves multiplied by the money multiplier determines the change in the money supply. This is because banks can create a multiple amount of deposits depending on the reserve requirement ratio, which is determined by the money multiplier. So, the actual change in the money supply is not directly equal to the change in reserves or required reserves, but rather depends on the money multiplier.

The Actual Change in the Money Supply Equals