Question

Explain the difference(s) between micro-budgeting and macro-budgeting. Which one should a local government use?

Answer 1

Macro budgeting can be considered as a very simple form of budgeting where you actually categorise your spending into two ways one is needs while the other is wants. Macro budgeting can be used by households as the budget modulation will be quite simple. Micro budgeting involves the complex procedure of categorising the spending into distinct micro units where every component of spending is recorded and it has to be mentioned that this form of budgeting is is to be used in complex scenario such as a whole country. If we consider the case of local government there can be many listings of spending which are quite complex and proper planning is required and therefore micro budgeting is the one that helps government in proper planning and execution.