Which transaction is a transfer payment?

Question

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A transfer payment is a payment made by the government to an individual, business, or organization that does not involve the production of a new good or service. In this case, the senior citizen receiving their pension payment is a transfer payment as it is a payment made by the government to an individual without the production of a new good or service. Options A and B are not transfer payments as they involve payment related to services provided (employee payment) or tax payment. Option D is not a transfer payment as it involves government spending on infrastructure which involves the production of a new good or service.

Which Transaction Is a Transfer Payment