Question

Which of the following is a type of "transfer payment" made by a state government?

• A. Building a new state highway
• B. Funding a public university system
• C. Paying a pension to a retired government employee
• D. Hiring additional teachers for public schools

Answer 1

Answer:

C. Paying a pension to a retired government employee

• Transfer payments are one-way payments where no goods or services are received in return.

• Pensions, subsidies, and grants are all examples.