In macroeconomic analysis, a transfer payment is considered a
A)positive tax.
B)fixed tax.
C)negative tax.
D)variable tax.

Question

Quizplus · Accepted Answer

A transfer payment is a payment made by the government to an individual or household without any expectation of a good or service in return. It is not a tax because it is not based on income or wealth, and it is not tied to any specific government program or service. Transfer payments are typically used to provide financial assistance to those who are in need, such as low-income families, the elderly, and the disabled. Therefore, a transfer payment is considered a negative tax.

In Macroeconomic Analysis, a Transfer Payment Is Considered a