In which of the following economic accounts are transfer payments included?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. . Government account.
- Transfer payments are included in the Government account.
- These are payments made by the government to individuals or groups without receiving any goods or services in return.
- Transfer payments typically include items such as social security benefits, pensions, and unemployment benefits.
- These payments are recorded in the government’s accounts because they involve the redistribution of income rather than a payment for services rendered.
- Hence, transfer payments are not a part of accounts like household, production, or appropriation accounts, but are primarily included under the Government account.