Final answer:
Multi-year budgets help managers focus on the long-term and make strategic investments. Government budgets often run deficits to invest in the country's future, balancing long-term goals with economic stability.
Step-by-step explanation:
The types of budgets that keep managers focused one year ahead and prevent too narrow a focus on short-term results are typically multi-year budgets. Multi-year budgets provide a broader perspective, fostering long-term planning and investments, which are crucial for ensuring the sustainability and growth of an organization. The federal budget, for instance, while prepared annually, includes projections and plans that extend beyond the upcoming fiscal year, allowing for strategic planning to ensure the country's long-term productivity.
A balanced government budget is not always expected in the medium term of a few years. Instead, running large budget deficits may be deemed rational if they enable crucial long-term investments in areas like human capital and physical infrastructure. Thus, government budgeting practices serve to stabilize the economy and plan for its future, even if it means enduring deficits for extended periods as long as debt growth remains smaller than GDP growth.