Think carefully.
There is low consumer demand; production capacity is unused; prices are stable or are falling; busi-ness profits are low; unemployment is high; and business confidence is low. Is this:
This is a description of a depression – the worst of all economic situations, which governments will do almost anything to avoid.
A recession is a decline in the performance of the economic factors mentioned (unemployment ris-es), and technically in the UK, a recession would be two successive quarters of decline (reducing economic activity / reducing GDP). A recovery is coming out of recession, and a boom is when the economy is in the opposite state to the depression shown in the question. Generally, an economy’s behaviour is cyclical.
‘Price’ and ‘payment terms’ are the same thing.
True or false?
An easy question.
Price is what the customer will pay for goods or services eg fifty dollars; payment terms are the ar-rangements under which you pay the price eg in advance, on delivery, 30 days, 60 days, etc.
Although this may seem rather obvious, I have encountered a surprising number of people who seem to confuse the two.
Doing the same with fewer resources is:
Economy is most easily thought of as paying less, hopefully with no loss of quality, service, etc
Effectiveness is most easily thought of as achieving the right outputs.
What one really seeks is effectiveness. Unfortunately it is possible to be efficient without being ef-fective. An example from my work life is the collection of statistics / ‘returns’. I have come across parts of organisations which were very efficient at collecting data, but the data were not used in any meaningful way – the outputs of the efficiency did not add value and did not create useful outputs. There was a lack of effectiveness. The distinction is worthwhile, I think.
The idea / practice that some users / internal customers will spend organisational funds without in-volving procurement professionals when required to do so by organisational rules, is called:
One of the best ways to combat maverick buying is for procurement to be seen to be doing a good job, reducing the justification in colleagues’ minds for going outside the system.
The other terms shown in the answers are simply made up to create the question.
This is your final question in this practice exam – good luck in the real exam!
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