Which budgeting method requires each expenditure programme to be justified from the beginning of every budget cycle?
Correct answer: B. Zero-based budgeting
- A. Incremental budgeting
- B. Zero-based budgeting
- C. Performance budgeting
- D. Line-item budgeting
Explanation
Zero-based budgeting starts from a zero base and requires proposed activities and expenditures to be justified afresh. Incremental budgeting usually modifies the previous budget rather than reassessing every programme completely.
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About Public Finance
Government revenue and expenditure are analysed through taxation, public borrowing, budgets, subsidies, transfers and public debt. The topic explains how fiscal policy affects resource allocation, income distribution, economic stability and growth, while distinguishing direct from indirect taxes, progressive from regressive taxation, and public goods from goods supplied by private markets.
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