UPSC CDS GS Economy Questions Part 2

Statements (1), (3) and (4) are the examples of transfer payments. Transfer payments refer to the payments which result in the redistribution of income. These payments are considered to be exhaustive because they do not directly absorb the resources or create output. This implies that the transfer is made without any exchange of goods or services. Examples of certain transfer payments include welfare (financial aid) measures, social security payments, old-age pension, unemployment allowance, government giving subsidies for certain businesses, etc.