Final answer:
When the Federal Reserve increases reserve requirements, the money supply decreases, which slows down the money multiplier process.
Step-by-step explanation:
When the Federal Reserve increases reserve requirements, it means that banks are required to hold a larger amount of their deposits as reserves and can lend out a smaller portion. This reduction in lending capacity decreases the money supply, as less money is available for loans and circulation. As a result, the money multiplier process, which is the process by which banks create new money through lending, is slowed down.