Final answer:
A decrease in the required reserve ratio from 10% to 8% with a new deposit of $10,000 allows more of the deposit to be loaned out, potentially increasing the money supply due to the money multiplier effect.
Step-by-step explanation:
When the required reserve ratio is decreased from 10 percent to 8 percent and there is a new deposit of $10,000, the maximum potential increase in the money supply is greater than when the ratio was higher. This is because banks are required to keep less money in reserve and can therefore lend out more of each deposit received.
With an 8 percent reserve requirement, a bank must hold $800 of the $10,000 deposit in reserve, leaving $9,200 available to be loaned out. If the money multiplier effect fully plays out (wherein the money that is loaned out is subsequently deposited and lent out again), this could lead to an increase in the total money supply by an amount calculated using the money multiplier formula (1/reserve ratio). In this case, the money multiplier is 1/0.08, or 12.5.
Thus, the theoretical maximum increase in the money supply is 12.5 times the initial deposit, assuming that all other conditions remain optimum for multiple rounds of lending and depositing.