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Q. |
Interest on public debt is a part of : |
A. | transfer payments by the enterprises |
B. | transfer payments by the Govt. |
C. | national income |
D. | interest payments by households |
Answer» B. transfer payments by the Govt. | |
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. In other words, the transfer is made without any exchange of goods or services. Examples of certain transfer payments include welfare (financial aid), interest on public debt, social security, and government making subsidies for certain businesses (firms). |
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