204.4 Lesson - stockToFlow

Screen: stockToFlow

Headline: Understanding the Stock to Flow Ratio

Reward: 3

Text: The Stock to Flow ratio is a measure of the rate at which new units of money are added to the existing supply.

To calculate it, you divide the existing amount of money by the amount produced each year.

For something to be a good way to save value, it should become more valuable when people want to use it to save, but the people who make it should not be able to add too much of it, which would make it less valuable.

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QUIZ

Question: What is the Stock to Flow ratio?

Answer: A measure of the rate at which new units of a monetary good are introduced into the existing supply.

Feedback: That's right! The Stock to Flow ratio can be a useful tool for understanding the stability and scarcity of a particular currency or commodity. Good job

Correct: true

Answer: A measure of a company's financial stability.

Feedback: Sorry, looks like you're mixing up your business jargon. Better luck with your next answer

Correct: false

Answer: A ratio used to compare the value of different currencies.

Feedback: Wrong! But hey, at least you're thinking about the global economy. Better luck with your next guess.

Correct: false