The correct Answer is A-2, B-4, C-1, D-3
Explanation
Economic variables can be classified as either stock or flow concepts. A stock variable is measured at a specific point in time, while a flow variable is measured over a period of time.
Statement-wise Analysis
- A. Inventory at year-end - 2. Stock concept
- Correct: Inventory at year-end represents the quantity of goods held by a firm at a particular moment (the end of the year). This is a measurement at a specific point in time, making it a stock concept.
- B. Change in Inventory - 4. Flow concept
- Correct: Change in inventory refers to the increase or decrease in inventory over a period, such as a quarter or a year. Since it is measured over a duration, it is a flow concept.
- C. Depreciation - 1. Flow concept
- Correct: Depreciation is the decrease in the value of an asset over a period due to wear and tear, obsolescence, or time. It is measured over a period (e.g., annual depreciation), making it a flow concept.
- D. Wealth - 3. Stock concept
- Correct: Wealth represents the total value of assets owned by an individual or entity at a specific point in time. It is a snapshot of assets at a given moment, thus a stock concept.
Therefore, the correct matching is A-2, B-4, C-1, D-3.
Key Takeaway
Stock variables are measured at a point in time, while flow variables are measured over a period of time.