Cost-of-living adjustments
A)Reduce the price effect of inflation.
B)Allow individuals to maintain their purchasing power during inflation.
C)Cause individuals to shorten their time horizons.
D)Maintain constant real interest rates.r.

Question

Quizplus · Accepted Answer

Cost-of-living adjustments help individuals to maintain their purchasing power during periods of inflation by adjusting their income or benefits to keep pace with rising prices. This prevents a decrease in their standard of living due to inflation.

Cost-Of-Living Adjustments