Take the Federal Reserve's reserve requirement for banks. Divide that figure into 1. The result is the amount of new money that could be created. So, say the Fed's reserve requirement is 18%. The deposit multiplier would be 1/.18, or 5.55. That means for every $1 in bank reserves, $5.55 could be added to the money supply. The lower the reserve requirement, the greater the amount of money that can be created (because more money is available to be lent).