Using T-accounts, show what happens to the money base, bank reserves and checkable deposits in the banking system when the Fed sells $2 million worth of bonds to the First National Bank. Using the simple model of multiple deposit creation, state the ultimate impact on M1 from the Fed's sale. For the problem, assume that no excess reserves are held by the banks, that the currency holdings of the public do not change, and that the required reserve ratio, r, is 10%.