Question

Income is a​ _______ variable, and financial wealth is a​ _______ variable. A. ​stock; flow. B. ​flow; stock. C. ​stock; stock. D. ​flow; flow. The term investment​, as used by​ economists, refers to the​ ___________. A. purchase of new houses by households only. B. accumulation of inventories by firms when production exceeds sales. C. purchase of new plants and equipment by firms and the purchase of new houses by households. D. purchase of bonds and shares of stock

Answer 1

Answer: The correct answers are "B. ​flow; stock" and  "C. purchase of new plants and equipment by firms and the purchase of new houses by households."

Explanation: Income is a​ flow variable, and financial wealth is a​ stock variable.  The term investment​, as used by​ economists, refers to the​ purchase of new plants and equipment by firms and the purchase of new houses by households.

Flow: variable whose quantity is measured per unit or given period of time; for example, income, investment.

Stock: variable whose quantity is measured at a certain moment of time; for example: population, wealth, capital stock.

The investment is related to using resources in order to achieve some benefit.