Transfer payments involve no exchange for goods or services

Steps:

• Recall the economic definition: Transfer payments are unilateral transfers without receiving goods, services, or productive output in return.
• Evaluate options against this: Check if each requires no productive activity or exchange.
• Eliminate A, B, C as they add unnecessary conditions not central to the definition.
• Confirm D matches the core non-productive nature of transfers like welfare or subsidies.

Why D is correct:

• By definition in economics, transfer payments are non-productive, meaning no goods or services are provided in exchange, distinguishing them from factor payments.

Why the others are wrong:

• A: Transfers can be in-kind (e.g., food stamps), not just cash.
• B: No banking is required; transfers can occur via checks, direct aid, or barter-like non-monetary means.
• C: Transfers can be private (e.g., family remittances) or international, not solely government-sourced.

Final answer: D