Asked by Michelle McDade on Jun 13, 2024
Verified
Which of the following best describes a stock rather than a flow?
A) Each week,you save $100.
B) Each week,you buy $10 worth of gasoline.
C) Each week,you buy $50 worth of groceries
D) You earn $500 per week at your job.
E) You own $5,000 worth of government bonds.
Stock Variable
A quantifiable amount at a particular point in time, such as the amount of money in circulation.
Government Bonds
Debt securities issued by a government to finance its expenditure, promising to pay a specified interest rate and to return the principal at maturity.
Groceries
Items of food and other goods sold by a grocer or supermarket, typically for household consumption.
- Delineate the differences between stock variables and flow variables in the field of economics.
Verified Answer
HS
Harjot SinghJun 14, 2024
Final Answer :
E
Explanation :
Stocks represent a cumulative amount of ownership in a company or financial asset, while flows represent the rate at which something is occurring. Owning $5,000 worth of government bonds represents a stock, whereas the other choices represent flows of money being saved or spent on a weekly basis.
Learning Objectives
- Delineate the differences between stock variables and flow variables in the field of economics.