Four of the Five Statements Below Contain a Stock and a Flow

question 22

Multiple Choice

Four of the five statements below contain a stock and a flow. Which statement describes ONLY stock variables OR flow variables?

• A)The Canadian Federal government has a debt of approximately $450 billion and an annual deficit of over $25 billion dollars.
• B)Nancy spends $400 per month on her credit card and has a balance owing of $2567.
• C)Chris earns $1500 per month and has $4 000 in his savings account at the bank.
• D)Country X spends an average of $1 million per year for flood relief and has an emergency services fund of $20 million.
• E)The Transit Authority of Mytown collects $22 000 in fares per day and has an operating budget of $2 million per year.

Understand the concepts of time value of money.

Comprehend the impact of compounding frequency on present and future values.

Familiarize with the definitions and characteristics of annuities, perpetuities, and amortized debt.

Recognize the relationship between present value, future value, and the discount rate.

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Definitions:

Duty to Warn

a legal obligation to inform others of a risk or hazard that is not immediately apparent, to prevent harm.

Section 402A

A part of the Restatement (Second) of Torts, introducing the concept of strict liability for producing and selling defective products that cause harm to the consumer.

Shrinkwrap Packaging

A method of packaging where a product is covered with a clear, tight-fitting plastic cover, often used for software boxes and other packaged goods.

Limitation of Remedies Clause

A contract provision that restricts the types of remedies available to the parties in case of breach, often to mitigate liability.