When everyone correctly anticipates that the Fed will buy government securities,then they know that prices will increase.Which of the following adjustments is not likely to occur?

Question

Quizplus · Accepted Answer

Producers preventing the price level from increasing and hurting their sales is not a likely adjustment because if prices are expected to increase due to Fed buying government securities, it would be rational for producers to raise prices and benefit from the inflationary situation. Workers negotiating higher wages and suppliers demanding higher prices for their resources are also likely adjustments in response to the anticipated increase in prices.

When Everyone Correctly Anticipates That the Fed Will Buy Government