1.

Distinguish between current transfers and capital transfers.

Answer»

The difference between current transfers and capital transfers are shown below:

Current transfersCapital transfers
1. Current transfers are paid out of the current income.1. They are paid from the past savings or wealth.
2. They add to the current income of the recipient.2. They help in capital formation.
3. They are made in for short- term expenditure.3. They are made for long-term expenditure.



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