A cost-of-living adjustment is based on the
A)financing approved by Congress during each session.
B)rate of inflation.
C)relationship between the level of the federal deficit compared to the nation's gross national product.
D)changing needs of each recipient.

Question

Quizplus · Accepted Answer

A cost-of-living adjustment (COLA) is based on the rate of inflation, specifically the Consumer Price Index (CPI) which measures the change in prices of goods and services over time. The purpose of the COLA is to ensure that government benefits, such as Social Security and veteran's pensions, keep pace with the rising cost of living. Other factors such as financing approved by Congress, federal deficit, and changing needs of recipients may also play a role in government policies, but they are not directly related to the calculation of a COLA.

A Cost-Of-Living Adjustment Is Based on the