Transfer payment
In macroeconomics together with finance, the transfer payment also called the government transfer or simply transfer is a redistribution of income and wealth by means of the government devloping a payment, without goods or services being received in return. These payments are considered to be non-exhaustive because they create not directly absorb resources or cause output. Examples of transfer payments add welfare, financial aid, social security, and government subsidies forbusinesses.
Unlike the exchange transaction which mutually benefits any the parties involved in it, the transfer payment consists of a donor and a recipient, with the donor giving up something of usefulness without receiving anything in return. Transfers can be featured both between individuals and entities, such as private companies or governmental bodies. These transactions can be both voluntary or involuntary and are generally motivated either by the altruism of the donor or the malevolence of the recipient.
For the goal of calculating gross domestic product GDP, government spending does not include transfer payments, which are the reallocation of money from one party to another rather than expenditure on newly submitted goods and services.