Stocks and flows

The amount spent in a week records expenditure occurring throughout the seven-day interval. Since it is measured over a period, it is a flow variable. Bank deposits and total wealth on a particular date are stocks because they show balances existing at one point in time. Therefore, option C is correct, and “in a week” is the clear period indicator.

The balance currently available in a bank account is measured at a particular point of time, so it is a stock variable. A stock represents an amount existing at a given moment, whereas a flow is measured over a period. Monthly income and annual expenditure are flows because they are measured during a month or year. Therefore, option D is correct.

A stock records the quantity existing at a particular point of time, whereas a flow records a quantity over a period of time. Flows can add to or reduce stocks: investment adds to the capital stock, while depreciation reduces it. Therefore, option A correctly describes their relationship. Options B and C interchange the definitions of stock and flow, and option D is incorrect because flows often change stocks.

The expression “per year” refers to measurement over a time period, so it indicates a flow. Annual income, yearly production, and expenditure during a year are flow variables. Words such as “today,” “now,” and “on a date” refer to a particular point in time and generally indicate stocks. Therefore, option D is correct.

A stock variable is measured at a particular point of time, such as wealth on 31 March, the balance in a bank account today, or the number of machines at the end of a year. It records a position or amount existing at that moment. Quantities measured during a month or year are flows, so option A is correct.

A flow variable measures an economic activity or amount accumulated during a period, such as a day, month, quarter, or year. Examples include income earned in a year, expenditure during a month, and production per day. In contrast, a stock is measured at one point of time, such as wealth on 31 March. Hence, option B is correct; the other options do not describe the time basis of a flow.

The total value of wealth is measured at a particular point of time, for example, the value of assets owned on 31 March. It does not represent an amount earned or spent during a period. Therefore, wealth is a stock variable. Income, expenditure, saving during a year, and production during a month are flow variables because they are measured over periods. Thus, option C is correct.

Monthly income is earned and measured during a one-month period, so it is a flow variable. The word “monthly” specifies an interval rather than a single date. Stock variables, such as wealth, capital stock, or a bank balance, are measured at a particular point of time. Hence, option D is the correct answer.

The total stock of capital means the quantity or value of machines, buildings, equipment, and other capital goods available at a particular point of time. Since it records an accumulated position at a date, it is a stock variable. Investment made during a year is a flow because it is measured over a period. Therefore, option A is correct.

Investment is measured as expenditure on additions to capital goods during a specified period, such as a year. It therefore represents a flow. The resulting capital stock is measured at a particular point of time, but investment itself is the change or addition occurring during the period. Hence, option B is correct.

The balance available in a bank account today represents the amount of money existing at a particular point of time. It is therefore a stock variable. Deposits made during a month or income earned during a year are flows because they are measured over periods. The balance may change when deposits, withdrawals, or interest are recorded, but the balance at today’s date remains a stock. Hence, option C is correct.

The amount deposited during one day is measured over the time interval of that day, so it is a flow variable. A flow may be expressed per day, per month, or per year. In contrast, the total balance in the account on a particular date is a stock variable because it is measured at one point of time. The wording “during one day” identifies a period, making option D correct.

National income is the total factor income earned by the residents of a country during a specified period, usually one year. Since it is measured over an interval of time, it is a flow variable. Capital stock and outstanding debt are measured at a particular point of time and are stocks. Thus, option A is correct.

Population measured on a particular date is a stock variable because it records the number of people existing at one point of time. Population change or the number of births during a year would be flows because they are measured over a period. The phrase “on a particular date” makes option B correct.

Saving done during one year is measured over the period of one year, so it is a flow variable. It represents the part of income not spent during that period. The accumulated stock of savings or total wealth held on a particular date is different: it is measured at a point in time and is therefore a stock. Since the question says “during one year,” option C is correct.

Total accumulated savings measured on a particular date are a stock variable. They represent the amount built up and available at that point of time, such as the savings balance on 31 March. Saving made during a month or year is a flow, but the accumulated total on a date is a stock. Therefore, option D is correct.

Total money supply at a particular point of time is a stock variable because it measures the amount of money existing in the economy at that moment. It is not measured as money created during a period. Income and consumption are usually flows because they are measured over time. Hence, option A is correct.

Consumption expenditure measured during a year is a flow variable because it records spending over a specified period. The word “during” identifies an interval of time. A cash balance or money stock measured on a particular date is a stock. Therefore, annual consumption expenditure is correctly classified as a flow, so option B is correct.

The stock of unsold goods at the end of the year is measured at one particular point of time, namely the year-end. It represents inventory available at that moment, so it is a stock variable. Production, sales, income, and expenditure during the year are flows because they are measured over an interval. Thus, option C is correct.

An increase in inventory during the year is measured over the duration of the year, so it is a flow variable. It shows the change in stock occurring during a period. The total inventory held at the end of the year is a stock because it is measured at one point of time. Hence, option D is correct.

The government’s total outstanding debt on a particular date is a stock variable because it measures the accumulated amount owed at one point of time. New borrowing during a year is a flow, as it is measured over a period. The phrase “on a date” identifies a stock position, so option A is correct.

New borrowing taken by the government during one year is a flow variable because it is measured over the period of one year. It records the addition to government debt during that interval. Total outstanding government debt on a particular date is a stock. Therefore, the correct answer is option B.

The water currently present in a tank is measured at a particular point of time, so it is a stock. It represents the quantity stored at that moment. Water entering or leaving the tank per minute would be a flow because it is measured over a period. Thus, the word “currently” makes option C correct.

Water entering a tank per minute is measured over a time interval, so it is a flow variable. It describes the rate or quantity entering during each minute. The water stored inside the tank at a particular moment is a stock. Therefore, the phrase “per minute” indicates a flow and option D is correct.

Gross domestic product is the monetary value of final goods and services produced within a country during a specified period, usually a quarter or a year. Since GDP is measured over an interval rather than at one instant, it is a flow variable. Wealth and capital stock are measured at points of time. Therefore, option A is correct.