Question

In: Economics

Identify an example of a flow variable.? a. ?The total amount of unemployment in an economy...

Identify an example of a flow variable.?

a.

?The total amount of unemployment in an economy

b.

?The amount of sales tax collected per year

c.

?The population of a country in a particular year

d.

?The volume of the federal government’s debt

e.

?The total amount of an individual’s wealth

Solutions

Expert Solution

A flow variable is measured over an period of time. Hence it can be said that it is measured per unit of time.

A stock variable is measured at point of time.

Since the total amount of unemployment in an economy is an example of stock variable because it is not measured over a period of time.

The population of a country in a particular year is an example of stock variable because it is not measured over a period of time.

The volume of the federal government’s debt is an example of stock variable because it is at a point of time.

The total amount of an individual’s wealth is an example of stock variable because it is measured at a point of time.

Since the total amount sales tax collected per year is  measured per unit of time and it changes every year.

Hence it is an example of flow variable.

Hence option b is the correct answer.

Option b; The amount of sales tax collected per year


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