Transfer payments are part of personal income but not national income because

Question

Quizplus · Accepted Answer

Transfer payments are payments made without any exchange of goods or services, and therefore do not represent any actual production of goods or services in the economy. They are simply a redistribution of income, and are thus not considered a part of national income. Personal income is an earnings concept, whereas national income is a receipts concept, which considers all forms of income earned by all factors of production in the economy.

Transfer Payments Are Part of Personal Income but Not National