Which of the following items is not considered as a transfer payment?

A. Pension pay
B. Government subsidy
C. Students’ grant
D. Doctor’s salary

Correct Answer:

Option D = Doctor’s salary

Explanation

Transfer payment is any payment made by a government in which no goods or services are being paid for. They include welfare, financial aid, social security, and government subsidies for certain businesses. From the options above, doctors’ salaries are a service paid for.