Isnt this answer wrong as if NIT is an example of transfer payments by citizens to government without reference to any direct benefit in return then subsidies should also be transfer income by government to citizens as the citizens dont give any direct benefit to government in returm???
Dear Student,
NO, this question is correct.
And NIT are not the transfer payments . Transfer payments include help given by one government to other or by government to people without any consideration and for the help of people. For example, If any area in country has flood and if government gives money for the the flood victims, this is transfer payment.
Whereas , NIT includes taxes and subsidies. Subsidies are the payment by the government to producers to to any section of society to boost the production activities.
NIT is the difference of taxes and subsidies.
Transfer payments are not considered while calculating National Income whereas NIT is considered while calculation of National Income.
Hope this information will clear your doubts on this topic.
If you have any more doubts just ask on the forum and our experts will try to help you out as soon as possible.
Regards
NO, this question is correct.
And NIT are not the transfer payments . Transfer payments include help given by one government to other or by government to people without any consideration and for the help of people. For example, If any area in country has flood and if government gives money for the the flood victims, this is transfer payment.
Whereas , NIT includes taxes and subsidies. Subsidies are the payment by the government to producers to to any section of society to boost the production activities.
NIT is the difference of taxes and subsidies.
Transfer payments are not considered while calculating National Income whereas NIT is considered while calculation of National Income.
Hope this information will clear your doubts on this topic.
If you have any more doubts just ask on the forum and our experts will try to help you out as soon as possible.
Regards