Q.

Interest on public, debt is part of -

A. Transfer payments by the enterprises
B. Transfer payments by the government.
C. National income
D. Interest payments by households
Answer» B. Transfer payments by the government.
Explanation: In economics, a transfer payment (or government transfer or simply transfer) is a redistribution of income in the market system. These payments are considered to be exhaustive because they do not directly absorb resources or create output. Examples of certain transfer payments include welfare (financial aid), social security, and government making subsidies for certain businesses (firms). Government debt is the debt owed by a central government. In the budget, it is listed among the transfer payments by the government.
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