Which type of budget allows for increased spending with an approval system?

The type of budget that allows for increased spending with an approval system is known as "Growth with approval." This approach is designed to accommodate additional expenditures as long as they receive necessary approval, making it more adaptable to changing circumstances or unexpected opportunities compared to more rigid budgeting methods.

In a "Growth with approval" budget, the initial allocation serves as a baseline, but if there are justified reasons for increased spending—such as a new marketing initiative or an opportunity to capitalize on an emerging trend—spending can be expanded upon obtaining the requisite approvals. This flexibility ensures that budgetary constraints do not stifle growth opportunities while still maintaining a level of oversight and accountability.

Contrastingly, flexible budgets allow for adjustments based on actual performance but do not inherently require approval for increases in spending, as they are often adjusted in real-time according to activity levels. Full flexibility budgets also support changes based on operational needs but lack the structured approval process that characterizes the chosen answer. Finally, fixed annual budgets remain static and do not allow for any increases in spending, regardless of circumstances, making them the least adaptable option.