Which of the following is an example of a stock variable?

Which of the following is an example of a stock variable?

• A. Income.
• B. Savings.
• C. The government debt.
• D. Investment.

Answer: (C)

A stock variable is a measure that is defined at a specific point in time. It represents a quantity accumulated up to that point and does not change over time unless there is a transaction that affects it. The government debt exemplifies this concept because it reflects the total amount of money that the government owes at a given moment. It includes all past budget deficits and surpluses accumulated over time, providing a snapshot of the current financial obligation. In contrast, other options, such as income and investment, are flow variables. Income measures the amount earned over a period of time (like a month or year), while investment refers to spending on capital goods over a specified time frame. Savings can also be seen as a flow variable, as it indicates the amount saved during a certain period rather than at a specific time. Therefore, the characteristic of being measured at a single point in time makes the government debt the correct example of a stock variable.

A stock variable is a measure that is defined at a specific point in time. It represents a quantity accumulated up to that point and does not change over time unless there is a transaction that affects it.

The government debt exemplifies this concept because it reflects the total amount of money that the government owes at a given moment. It includes all past budget deficits and surpluses accumulated over time, providing a snapshot of the current financial obligation.

In contrast, other options, such as income and investment, are flow variables. Income measures the amount earned over a period of time (like a month or year), while investment refers to spending on capital goods over a specified time frame. Savings can also be seen as a flow variable, as it indicates the amount saved during a certain period rather than at a specific time. Therefore, the characteristic of being measured at a single point in time makes the government debt the correct example of a stock variable.