Multiple choice

Interest on public debt is a part of

  1. transfer payments by the enterprises

  2. transfer payments by the Government

  3. National income

  4. interest payments by households
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Transfer payments are payments made without receiving any goods or services in return. Interest on public debt fits this definition because the government pays interest to bondholders without receiving any current service or product. National income calculation excludes transfer payments. Interest payments by households and enterprises are not transfer payments.

Keep practicing — related questions