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In this quick video well take a look at transfer payments. I think I can keep it under two minutes so lets get to it. For CIE economics you need to be aware of the definition of transfer payments. They are one-way payments (or in-kind benefits) in which no good, money or service is exchanged. Government transfer payments include social security, unemployment benefits and housing benefits. It seems clear why, but just to make sure you understand, lets review the reasoning behind government transfer payments. There are three major reasons for government transfer payments. Firstly, the government may aim to ensure a basic living standard for all members of society. In order to do so, some assistance may be needed for those who are not in strong financial positions. Secondly, it may seek to reduce inequality and poverty. This is tied to the third point. The government will redistribute money from the rich in the form of taxes to the poor in the form of transfer payments. By taxing the r