What is Cost of Living? - Expenses & Overview


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question 1 of 3

Which of the following is the best explanation of cost of living?

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1. What's a COLA?

2. What role does a price index play in cost of living?

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About This Quiz & Worksheet

This quiz/worksheet combo will help test your understanding of the cost of living. Some of the information you'll be assessed on includes an explanation of the cost of living as well as the meaning of the acronym COLA.

Quiz & Worksheet Goals

In these assessments you'll be tested on the:

  • Explanation of the cost of living
  • Meaning of the acronym COLA
  • Role of a price index in cost of living
  • Expense(s) unlikely to be included on a cost of living index
  • Two criticisms often leveled against COLAs

Skills Practiced

This quiz and worksheet allow students to test the following skills:

  • Reading comprehension - ensure that you draw the most important information from the related lesson on understanding the cost of living
  • Interpreting information - verify that you can read information regarding COLA and interpret it correctly
  • Information recall - access the knowledge you've gained regarding the role of a price index in the cost of living
  • Knowledge application - use your knowledge to answer questions about criticism often leveled at COLAs

Additional Learning

To learn more about the economy, review the accompanying lesson called What is Cost of Living? - Expenses & Overview. This lesson covers the following objectives:

  • Define the phrase 'cost of living'
  • Tell how COLAs fit into an understanding of the cost of living
  • Know what a price index is and how it is used to calculate the cost of living
  • List at least five common expenses used to determine price indexes
  • Relate two criticisms of COLAs