Meaning of annual increment

[FangFang]

Business English Lesson, Advanced Level

ESL/EFL Test #155 "Budgeting", question 6

The wrong way to prepare a budget is to include everything at last year's level plus annual ..........

(a) accrual
(b) increment
(c) inflation
(d) investment

Business English Lesson, Advanced Level

ESL/EFL Test #155 "Budgeting", answer 6

The wrong way to prepare a budget is to include everything at last year's level plus annual inflation.

Correct answer: (c) inflation

Your answer was: incorrect
The wrong way to prepare a budget is to include everything at last year's level plus annual increment.
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Hi,
I am not quite clear about this answer, isn't it right to use "increment" here?

Many thanks

[Mister Micawber]

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An increment calculated on some basis would be a good way to prepare a budget; the sentence, however, states the wrong way to do so.
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Native English teacher at Mister Micawber's

[FangFang]

Hi, MM
I am confused why you shouldn't consider the "inflation" when making a budget

FangFang

[Mister Micawber]

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The point the author is making is that you should not prepare a budget simply by taking last year's budget and adding a figure for inflation. Each year's budget needs close consideration, not a perfunctory addition for inflation.
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Native English teacher at Mister Micawber's

[Mister Micawber]

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PS: I've just edited that question slightly to address your concerns, FF. In doing so, I also noticed that increment would normally require an indefinite article, as it is countable; inflation is not and therefore does not.

Thanks for your comments and questions on these tests; it helps me improve their composition.
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Native English teacher at Mister Micawber's