Accounting · Management Accounting
In the context of public sector performance auditing, which statement provides the BEST description of the 'Three Es' framework (Economy, Efficiency, and Effectiveness)?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Economy measures public stock value; Efficiency evaluates gross market share; Effectiveness calculates customer brand loyalty.
- 2Effectiveness functions purely as an input metric, whereas Economy and Efficiency analyze external societal changes.
- 3Economy focuses on minimizing resource inputs; Efficiency relates inputs to outputs; Effectiveness links outputs to strategic objectives.✓
- 4Economy and Efficiency are pure input measures, while Effectiveness acts strictly as a monetary volume indicator.
Correct answer
Economy focuses on minimizing resource inputs; Efficiency relates inputs to outputs; Effectiveness links outputs to strategic objectives.
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