Question

Identify which of the following is a `Stock' variable:

• A. Monthly Salary of a teacher
• B. Distance between Delhi and Mumbai
• C. Annual Interest on savings
• D. Quantity of wheat produced in a year

Hint:

Stock is measured at a point in time (e.g., wealth, population, water in a tank). Flow is measured over a period of time (e.g., income, production, expenditure).

Answer 1

The Correct Option is B

Step 1: Understanding the Concept:
In macroeconomics, economic variables are classified based on their time dimension into Stocks and Flows.
A Stock variable is a quantity measured at a particular point in time (e.g., wealth, inventory, capital).
A Flow variable is a quantity measured over a specified period of time (e.g., income, consumption, production).
Step 2: Detailed Explanation:
(A) Monthly Salary: It is measured per month (a period), so it is a flow variable.
(B) Distance: The distance between two points is a static measurement that exists at any specific moment. It does not change based on how long you observe it, making it a stock variable.
(C) Annual Interest: It is calculated over a year (a period), making it a flow variable.
(D) Quantity of wheat produced in a year: Production is a process that occurs over time, making it a flow variable.
Step 3: Final Answer:
Among the given options, only the distance between two cities fits the definition of being measured at a point in time without a time-per-unit dimension.