Question 39 1.5 pts If the target federal funds rate reaches the effective lower bound (ELB), the FOMC OA) must stop purchasing securities since they cannot lower nominal rates below the zero lower bound. O DI would likely raise the discount rate. OB) would likely shift their focus to purchasing longer-term securities. OC) would likely raise the required reserve rate. 1.5 pts Question 40 When interest rates reduce, stock prices may increase because D) the present value of future earnings will decrease OC) financial market participants are less optimistic about future earnings OA) consumers and businesses are more confident about future growth OB) stockholders will expect lower future eamings