What is a transfer income?

The correct answer is Unearned income.

Key Points

• Transfer income refers to income received without providing any goods or services in return.
• This type of income typically includes welfare payments, social security benefits, and other government subsidies.
• It is termed unearned income as it is not earned through active employment or business activities.
• Examples include pensions, unemployment benefits, and child support payments.
• Transfer incomes are primarily aimed at supporting individuals and households in financial need.

Additional Information

• Earned Income: Income derived from active work such as salaries, wages, and business profits.
• Disposable Income: The amount of money left to spend or save after taxes have been deducted from earnings.
• Public Income: Revenue collected by the government from various sources like taxes, fees, and public enterprises.
• Unearned Income: Includes transfer incomes, interest, dividends, and other forms of income not resulting from labor or business activities.
• Transfer payments are a significant part of fiscal policy, used to redistribute wealth and provide financial stability to vulnerable populations.