One Characteristic of Incremental Budgeting Is That It

question 11

Multiple Choice

One characteristic of incremental budgeting is that it

• A) allows comparison using various units, like labor hours and dollars.
• B) is flexible toward changing environmental demands.
• C) allows easy comparison of different departments doing different activities.
• D) locks managers into stable spending arrangements.
• E) requires more time from managers than zero-based budgeting.

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Definitions:

Open Market Operations

Central bank activities involving buying and selling government securities in the marketplace to influence the money supply and interest rates.

Money Supply

The all-inclusive measure of monetary resources present in an economy at a specific juncture.

Interest Rates

The cost of borrowing money or the return for investing, typically expressed as a percentage of the principal, varying over time based on economic conditions.

Deposit Expansion Multiplier

The ratio that measures the potential increase in total deposits in the banking system generated from an increase in primary deposits.