Question : Which of the following is an example of a transfer payment in a government budget?
Option 1: Military spending
Option 2: Education spending
Option 3: Social security benefits
Option 4: Infrastructure spending
Correct Answer: Social security benefits
Solution : The correct answer is (c) Social security benefits
Transfer payments refer to payments made by the government to individuals, households, or other entities without the expectation of receiving goods or services in return.
Social security benefits are a type of transfer payment provided by the government to support individuals who are retired, disabled, or otherwise eligible for specific social security programs. These benefits are typically intended to provide income support and financial assistance to eligible individuals or households.
Transfer payments are a significant component of government budgets, and they often include other types of payments such as welfare benefits, unemployment compensation, pensions, and subsidies to individuals or businesses. These payments aim to redistribute income, provide social support, or address specific economic or social needs within society.
