Final answer:
A higher required reserve ratio results in a lower money multiplier, reducing the creation of new checkable-deposit money through loans. Central banks use reserve requirements to influence lending and the money supply.
Step-by-step explanation:
A higher required reserve ratio means a lower money multiplier and therefore less creation of new checkable-deposit money through loans. Changing reserve requirements is a monetary policy tool used by central banks. The reserve requirement is the percentage of deposits that banks are required to hold in reserve. When the reserve requirement is increased, banks must hold more capital in reserve and thus have less money to lend out. This decrease in lending capacity reduces the money multiplier, which is the amount of money that can be created in the banking system through lending. Conversely, a decrease in the reserve requirement allows banks to lend more of their deposits, increasing the money multiplier and the creation of new money.