Question on: JAMB Economics - 2022
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
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Correct Option: B
Option B is the correct answer.
Transfer payments refer to receipts that do not stem from participation in productive activities within the economy, but instead represent transfers of funds from one party to another. Examples of transfer payments include pensions, bursaries, awards, gifts, and unemployment benefits. When computing or estimating national income, transfer payments are not included.
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