Explain the difference between government subsidies and transfer payments. give an example of a transfer payment

The Sample Response is:

Subsidies are government financial aid given to businesses meant to help lower their costs or stimulate the economy. Transfer payments are government payments in which the government takes money from one group and gives it to another. Medicare, Social Security, and various welfare programs are all examples of government transfer programs.

My summarized answer is:

Subsidy is a government financial aid meant to stimulate the economy or promote certain kinds of production by lowering business costs. Transfer payments are government payments through which money is taken from one group to another. Financial aid is an example of a transfer payment.

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