MTTC Social Studies 2025 – 400 Free Practice Questions to Pass the Exam

Transfer payments are financial contributions made by the government to individuals or groups without the provision of goods or services in return. These payments are primarily designed to address income inequality by redistributing wealth. They help ensure that the basic needs of individuals and families in lower-income brackets are met, thus reducing the disparities in income and providing a safety net for the most vulnerable populations.

Income inequality occurs when a large gap exists between the wealthy and those with lower incomes, leading to potential social unrest and decreased economic mobility. Transfer payments, including social security, unemployment benefits, and welfare programs, function to alleviate this gap by providing essential financial support to those in need. By redistributing resources through these payments, the government seeks to promote a more equitable society.

The other options, while important issues, are not the primary focus of transfer payments. Economic growth, tax evasion, and environmental degradation require different types of policies and interventions that do not directly involve the transfer of funds to individuals as social safety measures.