Transfer payments redistribute income without exchange for production

Steps:

• Define transfer payment: Government payment to individuals without receiving goods/services in return.
• Analyze context: Unemployment benefits aid workers but involve no current output from recipient.
• Evaluate choices: Identify which matches definition of no production involved.
• Select best: Option tying to absence of goods/services production.

Why B is correct:

• Transfer payments, per economic definition, are unilateral transfers not linked to current production of goods or services, distinguishing them from factor payments like wages.

Why the others are wrong:

• A: Funding source (taxes) is irrelevant; transfers can come from various revenues, but essence is no exchange.
• C: Transfers are current government expenditures, often from taxes/borrowing, not specifically savings.
• D: No such restriction; recipients spend freely, unrelated to transfer classification.

Final answer: B