An example of transfer payments in national income accounting is
A. money transferred to another country B. unemployment allowance paid to the citizens C. the amount paid to a worker on transfer D. transfer of funds from one bank to another
Correct Answer: B
Explanation
Transfer payment are payment of receipts not resulting from contribution to productive activities in the economy. They are mere transfers from one person to another, for example: pension, bursary, award, gift, unemployment benefit etc. When estimating or calculating national income, transfer payment are excluded.
