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    Question

    Which of the following payment is not considered a Transfer payment ?

    A Scholarship given to meritorious students Correct Answer Incorrect Answer
    B Blue box subsidy given to limit the crop production Correct Answer Incorrect Answer
    C Prize given by the government Correct Answer Incorrect Answer
    D Salary to government employees Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    Transfer payments is the payment by the government in grants, allowances, pensions etc., to people such as pensioners, widows, sick or unemployed people or others with little or no income. Transfer payment doesn’t involve returning any productive service from the beneficiaries to the government.

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