Consider the balance sheets in Question 1. Bank A lends $50,000 to Anna by crediting her checking account by $50,000. After this loan is made, but before Anna withdraws the money, M1 money supply will equal dollars and M2 money supply will equal dollars. Use the Fed's rule after May 2020. Bank A Balance Sheet Assets Liabilities and Net Worth Uses of Funds Sources of Funds Reserves $65,000 Deposits Demand Deposits Savings Deposits Small Time Deposits Large Time Deposits $150,000 $750,000 $250,000 $500,000 Treasury Bonds $85,000 Borrowing From the Fed From the Fed Funds Market $50,000 $100,000 Loans Total $1,850,000 Net Worth $2,000,000 Total $200,000 $2,000,000 Bank B Balance Sheet Assets Liabilities and Net Worth Uses of Funds Sources of Funds Reserves $10,000 Deposits Demand Deposits Savings Deposits Small Time Deposits Large Time Deposits $100,000 $700,000 $240,000 $650,000 Treasury Bonds $40,000 Borrowing From the Fed From the Fed Funds Market $0 $30,000 Loans Total $1,900,000 Net Worth $1,950,000 Total $230,000 $1,950,000