What term refers to the method used to estimate the impact of changes in the money supply?

The term that refers to the method used to estimate the impact of changes in the money supply is indeed the Money Multiplier. This concept illustrates how initial changes in reserves, usually through the banking system, can lead to a more significant overall change in the total money supply. When the central bank injects money into the economy, banks can lend out a portion of those reserves. The money multiplier captures the ratio of the total money supply to the monetary base, effectively showing how much increase in the money supply can result from an increase in reserves.

When the central bank decreases or increases the reserve requirement, it alters the capacity of banks to create money through lending, thereby amplifying the effects of monetary policy decisions. This is pivotal to understanding monetary policy’s effectiveness and predicting how money supply changes will influence economic activity, inflation, and interest rates.

Other options refer to different financial concepts. The Deposit Multiplier, for example, is a specific term often used interchangeably with Money Multiplier but is more focused on the banking system's ability to expand deposits rather than directly estimating total money supply changes. The Tax Revenue Model relates to government revenue, while the Balance of Payments deals with international economic transactions, neither of which address the impact of changes in the money supply