What is a 'Continuing Resolution'?

Prepare for the Society of Defense Financial Management Exam. Study with flashcards and multiple choice questions, each question has hints and explanations. Ready yourself for your exam!

A 'Continuing Resolution' refers to a legislative mechanism that allows government agencies to maintain their operations and expenditure levels when a new budget has not been formally adopted. This is crucial for ensuring that essential government functions continue without interruption, as it provides a way to fund activities at prior year's budget levels or at specified amounts.

By enacting a Continuing Resolution, Congress can prevent a government shutdown that would occur if agencies were required to cease operations due to the lack of an approved budget. This tool is particularly useful when there is disagreement on budget priorities or when a more permanent budget is still being negotiated.

While the other options pertain to budgetary processes, they do not accurately describe the specific function and purpose of a Continuing Resolution as a law that permits ongoing operations under previously established funding levels.

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