Smash the Microsoft Azure Fundamentals Exam 2025 – Dive into the AZ-900 Adventure!

Tags in Azure are indeed name/value pairs of text data that can be applied not only to resources but also to resource groups. This capability allows users to organize and manage resources effectively by categorizing them based on various criteria, such as environment, project, cost center, or owner. By using tags, administrators can apply consistent labeling across resources, making it easier to search, filter, and report on them.

In Azure, tags play a crucial role in resource management and cost tracking. Organizations can utilize tags for budgeting and analysis, ensuring that resources are allocated correctly based on their associated tags. This also aids in the automation of processes and responses by allowing specific tagging strategies that align with operational and business needs.

Therefore, the most comprehensive description of a tag includes its application to both resources and resource groups, making option A the correct choice.