Transfer payments are payments made without any befit of currently produced goods or services. They only alter the overall household income and do not reflect the productivity of an economy. These payments generally flow from the government to households, including subsidies, pensions, and welfare benefits. Hence, all the above options are correct.

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Transfer Payments

Question 53

Multiple Choice

Transfer payments

A) are payments that flow from government to households.
B) are not made in exchange for currently produced goods or services.
C) alter household income,but they do not reflect the economy's production.
D) All of the above are correct.

Correct Answer: