Zero-Based Budgeting (ZBB) differs from traditional budgeting because:

Correct Answer: It requires justification for all expenses in each new period.

Subject: economics

• It evaluates only new expenditures.
• It requires justification for all expenses in each new period.
• It continues past allocations without review.
• It ignores revenue estimates.

Explanation: • <b>Key Fact</b> ZBB requires managers to justify all their expenses from 'zero' base in every new budget cycle. • <b>Supporting Detail</b> Traditional budgeting assumes past allocations are justified and only reviews incremental changes. • <b>Related Concept</b> It was first adopted formally by the Indian Government in 1986 (Seventh Five-Year Plan). • <b>Why wrong options are wrong</b> It does not evaluate only new expenditures; it re-evaluates everything. • <b>Exam Trick</b> Zero-base = Start from scratch (zero) every year. No free passes based on last year. • <b>Additional Info</b> Maharashtra was the first Indian state to implement ZBB.

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