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Answer: Transfer payment (transfer expenditure)

Concept: Transfer payments are payments received without any corresponding productive service in the current period, e.g. pensions, scholarships, unemployment allowance.

Explanation: Sunita’s pension is not a reward for current production, so it is a transfer payment. It is excluded from national income to avoid counting income that is not linked to current output; for the government it is transfer (non-developmental) expenditure.

Doubtly AI · 29 Oct 2026 AI-verified · Nov 2026 Report
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