You need to take the following steps to calculate the change in money supply if the reserve ratio is, let's say, 10 percent.
Determine the money multiplier by dividing one by the reserve ratio, which is the percentage of deposits that the central bank requires a bank to keep either as cash in their vaults or as deposits with a Federal Reserve Bank - (1 / 0.1 = 10).
Find out the change in reserves. For example, the Federal Reserve injects $1,000,000 into the economy through open market operation (i.e., selling $100,000 worth of US government bonds).
Estimate the maximum change in money supply by multiplying the change in reserves by the money multiplier.
Money Supply Change = Change in Reserves * Money Multiplier = $100,000 * 10 = $1,000,000
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