Which of the following is an example of a transfer payment?
A)Your grandma buys you a new watch for graduation.
B)A military contractor pays to move its employee from the East Coast to the West Coast.
C)The county office gives its low-income residents food stamps.
D)The government floats bonds for a new highway.

Question

Quizplus · Accepted Answer

A transfer payment is a payment made by the government to a household or firm without any exchange of goods or services, and it is not a payment for a resource or a product. The county office providing food stamps to low-income residents is an example of a transfer payment. Option A is incorrect because it involves an exchange of goods, while options B and D are incorrect because they involve payments for goods or services provided.

Which of the Following Is an Example of a Transfer