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Chapter 3: Problem 6

State whether each of the following is a stock variable or a flow variable, and explain your answer briefly. a. Total farm acreage in the U.S. b. Total spending on food in China c. The total value of U.S. imports from Europe d. Worldwide iPhone sales e. The total number of parking spaces in Los Angeles f. The total value of human capital in India g. Investment in new human capital in India

Short Answer

Expert verified
The total farm acreage in the U.S. and the total number of parking spaces in Los Angeles are stock variables as they represent a measured total at a specific point in time. However, total spending on food in China, the total value of U.S. imports from Europe, worldwide iPhone sales and investment in new human capital in India are examples of flow variables as they refer to amounts over a certain time frame.

Step by step solution

01

Analyzing total farm acreage in the U.S.

Total farm acreage in the U.S. is a stock variable since it represents a measured quantity at a particular point in time. The value does not reference any period.
02

Analyzing total spending on food in China

Total spending on food in China is a flow variable as it refers to an amount spent over a certain period of time, such as a year.
03

Analyzing the total value of U.S. imports from Europe

The total value of U.S. imports from Europe would be a flow variable as it shows the value of goods brought in over a set time period.
04

Analyzing worldwide iPhone sales

Worldwide iPhone sales represents a flow variable as it measures the number of iPhones sold over a specified time period.
05

Analyzing the total number of parking spaces in Los Angeles

The total number of parking spaces in Los Angeles is a stock variable since it represents a measured total at a specific point in time.
06

Analyzing the total value of human capital in India

The total value of human capital in India is stock variable since it quantifys the skill, knowledge, and experience within a country at a particular point in time.
07

Analyzing investment in new human capital in India

Investment in new human capital in India is a flow variable, as it refers to the amount of investment over a certain time frame.

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