Which of the following is an example of a transfer payment?
A) A federal income tax refund
B) A Social Security payment
C) The money you send to a friend through Venmo
D) The taxes corporations pay on profit

Question

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A transfer payment is a payment made by the government to an individual for which no goods or services are exchanged. Social Security payments are an example of transfer payments. A federal income tax refund (A) is not a transfer payment, as it is the return of previously paid taxes. Sending money to a friend through Venmo (C) is not a transfer payment, as it is a transaction between two individuals. Taxes paid by corporations on their profits (D) are not transfer payments either, as they are payments for goods or services received (such as infrastructure, protection, etc.).

Which of the Following Is an Example of a Transfer