A referendum is a direct vote by the electorate on a proposal, law, or political issue. It is a type of election where voters are asked to make a "Yes" or "No" decision on a proposal, question, or idea. Referendums can be binding or advisory, and they exist in a variety of forms. The principle or practice of submitting to popular vote a measure passed on or proposed by a legislative body or by popular initiative is known as a referendum. A referendum can be mandatory or optional, binding or consultative. Examples of referendums include contract ratifications, bylaw amendments, and budget approvals. State and federal governments can use a referendum to allow voters to approve or reject a new law, proposal, or course of action.