Question

Classify each of the following as either a stock or a flow.

a. Myung Park earns $\backslash (850$per week.

b. Time Warner purchases $\backslash )100$million in new telecommunications equipment this month.

c. Sally Schmidt has $\backslash (1,000$ in a savings account at a credit union.

d.$XYZ$, Inc., produces $200$units of output per week.

e. Giorgio Giannelli owns three private jets.

f. Apple's production declines by $750$digital devices per month.

g. Russia owes $\backslash )25$ billion to the International Monetary Fund.

Short answer

Solution for all the followings are classified as a stock or a flow.

Step-by-step solution

(Part a)

The Myung Park's flow rate is $\$850$per week. Since income flows from households to the firm during the week, and the flow is measured per unit of time.

(Part b)

The purchase of computer equipment by Time Warner of $\$100$million is a flow of money. Because income flows from households to businesses and is measured according to a unit of time such as a month.

Step 3:  (Part c)

The amount of money $\$1,000$in Sally Schmidt's savings account is indicative of the stock market. Because individuals save their income, there is no money going back and forth between the businesses and households.

 (Part d)

The output of $200$units produced by$XYZ$per week indicates a flow. The flow of goods between businesses and households takes place over time, and output is measured in terms of units like weeks.

 (Part e)

Giorgio Giannelli owns three private planes. This shows a stock. All types of physical property are included in stock.

 (Part f)

The General Motors production decline by $750$autos per month shows a trend, as production is in process but with a decrease in the output. This is measured in terms of units of time, like a month.

 (Part g)

If Russia owes $\$25$billions to the International Monetary Fund$\left(IMF\right)$, this indicates a reserve. Unless there is payment, there is no flow of money.