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    Question

    Interest payments on public debt are considered part

    of: 
    A Transfer payments by enterprises Correct Answer Incorrect Answer
    B Transfer payments by the government Correct Answer Incorrect Answer
    C National income Correct Answer Incorrect Answer
    D Interest payments by households Correct Answer Incorrect Answer

    Solution

    Interest payments on public debt are transfer payments made by the government, as they do not correspond to the production of goods and services but are payments for past borrowing.

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