External Failure Activities

question 105

Multiple Choice

External failure activities:

• A) seek to prevent defects in the products or services being produced.
• B) inspect inputs and attributes of individual units of products or services to detect whether they conform to specifications or customer expectations.
• C) correct defective processes or products and services before they are delivered to customers.
• D) are activities required after defective products or services are delivered to customers.

---

Definitions:

Inflation

An increase in the average cost of goods and services, resulting in a drop in the value of purchasing power.

Unemployment Rate

The unemployment rate represents the proportion of the workforce that is without a job and is actively looking for work.

Monetary Neutrality

The theory that changes in the money supply only affect nominal variables (like prices) and not real variables (like output) in the long run.

Phillips Curve

An economic concept depicting an inverse relationship between the rate of unemployment and the rate of inflation in an economy over time.