Which of the Following Represents a Transfer Payment

question 124

Multiple Choice

Which of the following represents a transfer payment?

• A)You transfer $1000 from your bank account to a mutual fund.
• B)The bank transfers $10 quarterly interest to your savings account.
• C)The government sends your grandfather his pension cheque.
• D)Your employer automatically transfers $100 each month from your wages to a nontaxable medical spending account.

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Definitions:

Income Tax

A tax levied by governments on individuals or entities based on their income or profits, varying according to earnings levels.

Corporation Income Tax

A tax imposed on the net income of a corporation, calculated based on the company's profit.

Capital Flow

The movement of money for the purpose of investment, trade, or business production, either within a country or internationally.

Tax Shifting

The transfer of the burden of a tax from the entity legally responsible for paying it to another party, often consumers, through higher prices.