Transfer payments redistribute income without producing goods or services

Steps:

• Define transfer payment: A payment from one entity to another without exchange for goods, services, or production, like welfare or subsidies.
• Identify common mechanisms: These often involve financial systems (banks, cash) and typically originate from government.
• Eliminate options tied to execution: Bank deposits, cash deposits, and government are frequently part of the process.
• Confirm exclusion: Production requires creating value through goods/services, which transfer payments bypass.

Why D is correct:

• Transfer payments, per economic definition, involve no current production or exchange of newly created goods/services, only redistribution of existing income.

Why the others are wrong:

• A: Electronic transfer payments commonly use bank deposits for processing.
• B: Some transfer payments, like direct cash aid, involve cash deposits or withdrawals.
• C: Governments are primary sources of transfer payments, such as social security or unemployment benefits.

Final answer: D