ACCA BT · Chapter 1 · Question 3 of 11
In the context of public sector performance, 'value for money' is often analysed using three Es. Which of the following correctly defines 'efficiency'?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) The relationship between the outputs produced and the resources used to produce them
Explanation
Efficiency compares outputs with inputs, i.e. getting the most output from a given level of resources. Economy concerns buying inputs of appropriate quality at the lowest cost. Effectiveness concerns whether objectives are achieved. Fairness of distribution (equity) is sometimes added as a fourth E but it is not efficiency.
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