Question
Differentiate between Current transfers and Capital Transfers.
| S. no. | Basis | Current Transfers | Capital Transfers |
| 1. | Made out of | Transfers made from the current income of the payer and added to the current income of the recipient the current income of the recipient expenditure are called current transfers. | Capital transfers are defined as transfers in cash and in kind for the purpose of investment wealth or saving of the donor. |
| 2. | Concept | Recurring or regular in nature. | Non-recurring or irregular in nature. |
| 3. | Example | Scholarships, gifts, old age pension, etc. | Investment grant, capital gains, tax, war damages, etc. |
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| National Income | = | 1200 |
| Autonomous consumption expenditure | = | 150 |
| Marginal Propensity to consume | = | 0.8 |