Transfer payments involve unearned income without goods or services exchanged

Steps:

• Define transfer payment as government or private redistribution of income without productive exchange.
• Evaluate options: identify if payment compensates for current production or is pure redistribution.
• Eliminate payments tied to goods, services, or production costs.
• Confirm the option that fits unrequited transfer.

Why B is correct:

• Parental allowance is unearned income to the child, fitting the definition of a private transfer payment with no exchange of goods or services.

Why the others are wrong:

• A: Advertising is a firm expense for marketing services, not a transfer.
• C: Rent compensates for land use, involving exchange of property rights.
• D: Wage pays for labor in government service, a productive exchange.

Final answer: B