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    Question

    Which one of the following transactions will be considered as a transfer payment?

    A Payment of pocket money to children Correct Answer Incorrect Answer
    B Broker's commission in some auction Correct Answer Incorrect Answer
    C Financial support to a startup Correct Answer Incorrect Answer
    D Sale of Car Correct Answer Incorrect Answer

    Solution

    Unlike the exchange transaction which mutually benefits all the parties involved in it, the transfer payment consists of a donor and a recipient, with the donor giving up something of value without receiving anything in return.

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