If the fed sells $2 million of bonds to the first national bank, what happens to reserves and the monetary base?
use t-accounts to explain your answer.

Reserves fall by $2 million, and the monetary base falls by $2 million.

Explanation:

In the books of First National Bank, the purchase of $2 million of bonds by First National Bank, from the Federal Reserve means there is a reserve with the Federal Reserve represented by security which stands as asset.

In the books of the Federal Reserve, The sales of bonds to First National Bank will create a liability from the reserve assets.

See attached for the T-accounts explain the answer    

because she sucked. : )

(but so does trump, don't @ me)

answer; bootstrapping is your answer;