Which of the following is a stock variable?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Number of machines in a factory on 31 March
A stock is measured at a point of time. The number of machines on 31 March is counted on one date, so it is a stock.
Option (1) Number of machines in a factory on 31 March — Correct. It is counted at a point of time, 31 March.
Option (2) Profits earned by a factory during a year — Incorrect. Profits are earned over a period, a year. They are a flow.
Option (3) Number of machines added to a factory during a year — Incorrect. Machines added during a year are a change in stock, and a change in stock is a flow.
Option (4) Value of goods produced by a factory during a month — Incorrect. Output during a month is measured over a period, so it is a flow.
NCERT (2026-27): “2.1 Some Basic Concepts of Macroeconomics … The buildings or machines in a factory are there irrespective of the specific time period. There can be addition to, or deduction from, these if a new machine is added or a machine falls in disuse and is not replaced. These are called stocks. Stocks are defined at a particular point of time. However we can measure a change in stock over a specific period of time like how many machines were added this year. Such changes in stocks are thus flows, which can be measured over specific time periods. A particular machine can be part of the capital stock for many years (unless it wears out); but that machine can be part of the flow of new machines added to the capital stock only for a single year when it was initially installed. …” |