A cost of living adjustment or COLA
A)is usually pegged to the GDP deflator.
B)increases the nominal value of a contract as the rate of inflation increases.
C)protects the purchasing power of uninvested cash balances.
D)all of these.

Question

Quizplus · Accepted Answer

A cost of living adjustment (COLA) is designed to adjust salaries or wages based on changes in the cost of living, thereby protecting the real value of income against inflation. It does not directly relate to the GDP deflator or protect uninvested cash balances.

A Cost of Living Adjustment or COLA