The Goods and Services Differential Provides the Basis for Paying

Multiple Choice

The goods and services differential provides the basis for paying expatriates a cost-of-living allowance. What factor does not need to be considered when calculating the differential?

A) A comparison of the cost of a "market basket" of goods and services in the home country with the cost of a similar basket in the assignment country
B) Coming up with prices for items such as domestic supplies, food, transportation, and utilities across countries is a simple, logical process, but must be updated frequently
C) Goods and services differentials need to be monitored and periodically adjusted up or down
D) Currency swings can impact goods and services differentials by swelling the value of differentials when local currencies drop significantly and shrinking them when those currencies soar