Question 1

**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?

Accepted Answer

Match the action (buying inputs cheaper) to the correct 'E'. Economy = Input cost. Efficiency = Input/Output ratio. Effectiveness = Output/Outcome.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Confusing Economy with Efficiency. Efficiency would be if the library managed to lend out more books using the same number of staff.

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?

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA PM — Performance Management Practice Exam 6

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