Menu Costs of Inflation

question 103

Multiple Choice

Menu costs of inflation

• A) literally mean that restaurants are the most affected by inflation because they are constantly printing new menus.
• B) are best described as the costs firms incur by having to change prices either on paper or in the computer.
• C) are the costs one incurs when shopping for lower prices.
• D) are the costs involved with only those goods whose prices are rising faster than inflation; this basket of goods represents the "menu."
• E) mean that because we can choose what goods we consume,we have a menu of inflation from which to choose and we can "opt out" by consuming a different "basket" of consumer goods.

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Definitions:

Distributional Errors

Mistakes made in performance appraisals where ratings are clustered at a particular area of the scale, failing to accurately reflect the actual distribution of performance.

Leniency Error

Leniency error occurs in the assessment process when an evaluator consistently rates individuals more positively than their performance warrants, often due to a desire to avoid conflict or to be perceived as favorable.

Performance Ratings

The assessment and documentation of an employee’s job performance using various methods, including qualitative and quantitative metrics.

Manager

An individual responsible for directing and overseeing the work of a group of people in an organization, making decisions, planning, and implementing strategies to achieve goals.