Question

Which of the following is a true statement?

A) Money and income are flow variables.
B) Money is a flow variable.
C) Income is a flow variable.
D) Money and income are stock variables.

Answer 1

Money is a flow variable, while income is a stock variable.

Step-by-step explanation:

The correct statement is B) Money is a flow variable.

In economics, a flow variable refers to a quantity that is measured over a period of time. Money is considered a flow variable because it represents the rate at which currency is exchanged and used in the economy.

Income, on the other hand, is a stock variable because it measures the total amount of money earned or received during a specific period of time.