Stocks and flows

Correct answer: B. Flow

Explanation: The purchase of new machines during a year is measured over a period, so it is a flow variable. In national accounting, such expenditure is part of investment during that year. The machines owned by the company at a particular date would be capital stock, but the purchase occurring throughout the year is a flow.

Correct answer: C. The first is a stock and the second is a flow

Explanation: The bank balance on 30 June is measured at a specific date, so it is a stock. Deposits made during June are added over the course of a month, so they are a flow. The same monetary item can therefore be classified differently depending on whether it is a balance at a date or an amount recorded during a period.

Correct answer: B. Annual income and monthly expenditure

Explanation: Annual income and monthly expenditure are both measured over defined periods: a year and a month respectively. Therefore, both are flow variables. Bank balances, wealth, capital stock, and inventory generally refer to amounts existing at a particular time and are therefore stocks when no period activity is specified.

Correct answer: C. Total population and bank balance

Explanation: Total population and a bank balance represent quantities existing at a particular point in time, so both are stock variables when stated as totals or balances. The other options describe activities occurring over days, weeks, months, or years, such as output, sales, saving, expenditure, and tax collection; these are flows.

Correct answer: B. Stock

Explanation: The shop's inventory valued at ten lakh rupees on 1 April is a stock variable because it is measured at a particular date. It shows the quantity of goods held by the shop at that instant, rather than the goods purchased or sold during a period. Purchases and sales over a month or year would be flow variables. Hence, option B is correct.

Correct answer: B. Flow

Explanation: Sales during April are measured over the interval of one month, so they are a flow variable. Sales record an economic activity taking place throughout a period. By contrast, the shop's inventory on a particular date would be a stock because it records the goods available at one point in time.

Correct answer: B. Total wealth and monthly rent

Explanation: Total wealth is an accumulated value measured at a point in time, so it is a stock. Monthly rent is an amount paid over a month, so it is a flow. Option C reverses the order, while options A and D place the flow first; therefore, only option B satisfies the required stock-then-flow sequence.

Correct answer: A. Monthly income and cash balance

Explanation: Monthly income is measured over the duration of a month, so it is a flow. A cash balance is the amount held at a particular point in time, so it is a stock. The other options either begin with a stock or place a period-based variable second, and therefore do not show the required flow-then-stock order.

Correct answer: C. Monthly income is a flow and the deposit balance is a stock

Explanation: Monthly income is earned throughout a month, so it is a flow variable. The deposit balance at the end of the month is measured on one specified date, so it is a stock variable. Although deposits may result from earlier flows of saving, the balance itself is a stock at the date of measurement.

Correct answer: C. Wealth, population, money supply

Explanation: Wealth, population, and money supply are stock variables because each represents a quantity measured at a particular point of time. Wealth is the accumulated value of assets, population is counted on a date, and money supply is the total money available at a given time. Saving, income, output, sales, investment, taxes, and imports are generally measured over a period and are therefore flows.

Correct answer: B. Money supply is total money at a point and flow is transactions over a period

Explanation: Money supply is a stock because it measures the total quantity of money existing in the economy at a particular point of time. In contrast, the flow of money refers to payments or transactions taking place during a specified period, such as a month or year. Thus, option B correctly separates a balance from movement.

Correct answer: B. Cash today is a stock and weekly spending is a flow

Explanation: A stock is measured at a particular point in time, whereas a flow is measured over a period of time. The cash present in the student’s pocket today is a balance at one date, so it is a stock. Cash spent during the week is recorded over seven days, so it is expenditure during a period and therefore a flow. The time reference determines the classification.

Correct answer: D. National wealth is a flow

Explanation: National wealth is a stock, not a flow, because it represents the accumulated value of assets owned by a nation at a particular point of time. National income is earned and measured over a period, so it is a flow. Therefore, the statement that national wealth is a flow is incorrect.

Correct answer: C. Capital stock is a stock and investment is a flow

Explanation: Capital stock represents the value of capital assets available at a particular point in time, so it is a stock. Investment represents the addition to the capital stock made during a specified period, here one year, so it is a flow. The figures of ten crore and two crore do not change this conceptual classification; the relevant distinction is the time dimension.

Correct answer: A. Saving during the year is a flow and accumulated saving at year-end is a stock

Explanation: Saving made during a year is measured over the entire year, so it is a flow. Accumulated saving at the end of the year is the balance built up by past saving and measured on a particular date, so it is a stock. In general, a flow can change a stock: regular saving adds to accumulated wealth or financial balances over time.

Correct answer: B. Income is flow and wealth is stock

Explanation: Income is a flow because it is earned or received over a period such as a month or year. Wealth is a stock because it represents the accumulated value of assets and liabilities at a particular point of time. Thus, income adds to wealth over time, but the two concepts are not identical.

Correct answer: B. Opening balance is stock and change is flow

Explanation: The opening inventory balance is the quantity of goods existing at the beginning of a specified date, so it is a stock. The change in inventory records an increase or decrease occurring throughout the year, so it is a flow. A balance is a stock, while its change over time is a flow.

Correct answer: B. Flow

Explanation: A flow is measured over a period of time. The increase in population during a year records the change that occurs throughout that year, so it is a flow. By contrast, the total population on a particular date is a stock because it is measured at one point in time. Thus, population growth during the year is correctly classified as a flow.

Correct answer: B. Stock

Explanation: A stock is measured at a specific point in time. The census records the country’s total population on a particular date, so that population figure is a stock. It does not measure births, deaths, or population change over an interval. Those events or changes would be flows, whereas the total number existing on the census date is the stock.

Correct answer: B. Births are a flow and population is a stock

Explanation: The number of births in a year is counted over an interval from the beginning to the end of the year, so it is a flow. Total population on a specified date is measured at one point in time, so it is a stock. The same population can rise through flows such as births and immigration and fall through flows such as deaths and emigration.

Correct answer: A. Production is flow and capital stock is stock

Explanation: Production is measured as the quantity produced over a period such as a day, month, or year, so it is a flow. Capital stock is the value or quantity of productive assets available at a particular point of time, so it is a stock. Capital may generate production flows over time.

Correct answer: B. House is stock and annual rent is flow

Explanation: A house is an asset whose value is measured at a particular point of time, so it is a stock. Annual rent represents the income or service value generated by the house over a year, so it is a flow. The asset and the return earned from using it have different time dimensions.

Correct answer: B. Flow

Explanation: Depreciation caused by wear and tear is measured over a period, such as a year, because it records the reduction in the value of machines during that interval. Therefore, depreciation is a flow. The remaining value of the machines on a particular date would be a capital stock. A change in a stock over time is normally treated as a flow.

Correct answer: B. Stock

Explanation: Written-down value at the end of the year is the book value of machines existing on a specified date. Since it is measured at that point of time, it is a stock variable. Annual sales and monthly income are flows because they are measured over periods, not as balances on one date.

Correct answer: B. Flow

Explanation: The phrase “per day” indicates a rate or quantity measured over a time period. Such a variable is generally treated as a flow, because it records an amount occurring during each day. A stock, in contrast, is measured at a point of time, such as cash held on a particular date.