Practice Quiz

CLEP US Government

Category - Policy Processes

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Developing budgets by using last year’s budget as the base and adding an amount to cover the increased costs of doing business (inflation) in addition to any new programs is called:
  1. Deficit budgeting
  2. Program-planning-budgeting-system
  3. Incremental budgeting
  4. Zero-based budgeting
  5. Accountancy
Explanation
Answer: C - The US government generally practices incremental budgeting: taking the amount of money spent the previous year and adding a little to it. While this is a much easier way to create a budget, it does cause some public policy problems. First, it encourages bureaucratic agencies to spend all the money they can to ensure that they have enough money for next year. Second, it fails to adequately differentiate between effective and ineffective programs.
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