What is the formula for the money supply multiplier and how does it work? That is, explain the process if you need to.

The money supply multiplier is simply the multiplier that
tells us how much the money supply will go up when a given amount of money is deposited
in a bank.

When the money is deposited in a bank, some
fraction of the money is then lent out.  The borrower deposits the money in their own
bank, which lends a fraction of it out in turn.  This keeps happening over and over
again.

The formula for this is simply 1/reserve
requirement.

So, if the reserve requirement is .1 (10%),
the money multiplier is 10.  If this is the case, $1000 deposited in a bank will
increase the money supply by $10,000.