Which of the following best defines a transfer payment?
A) government spending on imported goods
B) money that Canadian citizens working abroad send back to their families in Canada
C) payments to governments, other than taxes
D) a form of government spending that is not made in exchange for a currently produced good or service

Question

Quizplus · Accepted Answer

A transfer payment is a type of government spending that is not made in exchange for a currently produced good or service. Transfer payments are typically made to individuals or groups, such as social security payments to retirees or welfare payments to low-income families. Therefore, option D is the best choice that defines transfer payment. Option A is incorrect as it talks about government spending on imported goods. Option B is incorrect as it talks about money being transferred from abroad to Canada. Option C is incorrect as it talks about payments to governments other than taxes, which is not a transfer payment.

Which of the Following Best Defines a Transfer Payment