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Identify the flow variable amongst the following alternatives.
  • a)
    Cash at bank in the saving account of a household
  • b)
    Interest received by a household on his deposits in the bank
  • c)
    Capital stock of a firm
  • d)
    Wealth of an industrialist
Correct answer is option 'B'. Can you explain this answer?
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Identify the flow variable amongst the following alternatives.a)Cash a...
Flow variables are economic variables that represent the changes in economic values over a specific period of time. They are measured per unit of time, such as per day, per month, or per year. Among the given alternatives, the following are the reasons why Option B is the flow variable:
Option A: Cash at bank in the saving account of a household
  • This is a stock variable because it represents the accumulated savings of a household at a specific point in time.
Option B: Interest received by a household on his deposits in the bank
  • This is a flow variable because it represents the income generated from the deposits over a specific period of time (e.g., monthly or yearly interest).
Option C: Capital stock of a firm
  • This is a stock variable because it represents the total value of a firm's capital assets at a specific point in time.
Option D: Wealth of an industrialist
  • This is a stock variable because it represents the accumulated wealth of an individual at a specific point in time.
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Identify the flow variable amongst the following alternatives.a)Cash at bank in the saving account of a householdb)Interest received by a household on his deposits in the bankc)Capital stock of a firmd)Wealth of an industrialistCorrect answer is option 'B'. Can you explain this answer?
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