Concept:A transfer payment is a sum of money given without receiving any good, service, or productive input in return. It is a one‑way transfer, often used by governments to redistribute income.
Explanation:Step 1: Identify the core feature – no exchange takes place. The recipient does not provide any money, goods, or services to the payer.
Step 2: Common examples include old‑age pensions, student grants, unemployment benefits, and disability allowances. These are given to support people with little or no income.
Step 3: Note that transfer payments do not involve any productive service from the beneficiary to the government. They are different from payments for goods, services, or factors of production.
Step 4: Check the options: Option A describes payment for imported goods – that is a purchase, not a transfer. Option B refers to undistributed profit, which is not a payment. Option D is a payment for use of goods or services. Only Option C correctly states that it is a one‑way payment with no exchange of money, good, or service.
Answer:Option C – It is a one‑way payment to a person who has given or exchanged no money, good, or service for it.