Question

Government transfer payments:A) are included as part of government purchases, G.B) can be viewed as negative tax payments, T.C) are received as payment for inputs in the factor market.D) do not affect the level of public or private saving.

Answer 1

Answer:

The correct answer is letter "B": can be viewed as negative tax payments, T.

Explanation:

In the U.S., government transfer payments or simply called transfer payments are local, state and federal payments the government sends to individuals enrolled in social programs such as the Social Security, Medicaid or unemployment welfare.  

They are considered negative tax payments since the funds used comes from taxpayers but it is not redistributed to investments of public interest. However, income received by individuals in need from the government is taxed, too.