Final answer:
An example of a transfer payment is unemployment benefits. Transfer payments are when the government gives money without receiving any goods or services in return, enabling recipients to participate in the economy.
Step-by-step explanation:
Transfer payments are a form of government expenditure where payments are made to individuals without the government receiving any goods or services in return. These payments enable recipients to participate in the economy and can include Social Security, disability for military service, welfare, or unemployment benefits. It's important to distinguish that while unilateral transfers involve money flowing out of the country, such as military aid and foreign aid, the commonality is that in both cases, no goods or services are directly received in exchange for these payments.
In the context of the question asked by the student, the example of a transfer payment is unemployment benefits, which is option 3. Military purchases, although related to government spending, involve an exchange for goods and services and thus are not considered transfer payments.