Government Transfers
Government transfers are payments from the government to households or individuals, such as unemployment benefits and pensions, for which no good or service is provided in direct exchange. Common examples include social security benefits in Europe and Medicare in the United States. Crucially, these transfers are not included in government spending (G) in national accounts. This exclusion is to prevent double-counting, as transfers represent income for households, and when this income is spent, it is recorded as either consumption (C) or investment (I).
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