Multiple choice

Which of the following is not an example of transfer payments?

  1. Scholarships to poor but meritorious students

  2. Pension paid to government employees after their retirement

  3. Railway fare

  4. Unemployment compensation
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

It is not an example of transfer payments. The railway fare is an example of commercial revenue for government, not an example of transfer payments. The government charges the fare for providing the service of travelling in train, but in transfer payment the government incurs the expenditure for social welfare.

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