ExpertEasy2 marksMultiple Choice
ACCA · Question 14 · Performance measurement and control
Section A
A government-funded public library is evaluating its performance using the 'Value for Money' (3 Es) framework. The library recently negotiated a 10% discount on bulk purchases of new books from publishers.
Which of the 3 Es does this achievement primarily demonstrate?
Section A
A government-funded public library is evaluating its performance using the 'Value for Money' (3 Es) framework. The library recently negotiated a 10% discount on bulk purchases of new books from publishers.
Which of the 3 Es does this achievement primarily demonstrate?
Answer options:
A.
Economy
B.
Efficiency
C.
Effectiveness
D.
Equity
How to approach this question
Match the action (buying inputs cheaper) to the correct 'E'. Economy = Input cost. Efficiency = Input/Output ratio. Effectiveness = Output/Outcome.
Full Answer
A.Economy✓ Correct
In the Value for Money framework, 'Economy' refers to acquiring resources (inputs) of the appropriate quality at the lowest possible cost. Negotiating a discount on books is a direct example of improving economy.
Common mistakes
Confusing Economy with Efficiency. Efficiency would be if the library managed to lend out more books using the same number of staff.
Practice the full ACCA PM — Performance Management Practice Exam 6
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