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A zero-based budget approach is defined by the necessity for all expenses to be justified for each new budget period, rather than relying on the prior year's expenditures as a starting point. This means that every departmental budget must begin from a "zero base," and all activities must be assessed for their needs and costs. This approach ensures that resources are allocated according to current priorities and goals, rather than just carrying over previous expenditures.

In this budgeting method, every expense must be justified and approved, providing a clear understanding of why each cost is necessary. It encourages strategic thinking and can lead to greater efficiency as it often uncovers areas where cost reductions can be made or where funds can be reallocated to more critical areas.

The other options do not accurately describe the zero-based budgeting concept. While some budgeting approaches rely on historical data or set increases based on inflation, the zero-based method specifically requires a fresh justification for every expense, aligning resources with the current strategic direction of the organization.