Explanation:

Correct Option: (a) Explanation:  Statement 2 is incorrect: National income (for eg., GDP) is a fl ow. Supplementary notes: Stock and fl ow variables  A fl ow is a quantity that is measured with reference to a period of time. Thus, fl ows are de fi ned with reference to a speci fi c period (length of time), e.g., hours, days, weeks, months or years. It has a time dimension.  National income (for eg., GDP) is a fl ow. It describes and measures the fl ow of goods and services which become available to a country during a year.  The income of a person is a fl ow that is earned during a week or a month or any other period. Likewise, investment (i.e., adding to the stock of capital) is a fl ow as it pertains to a period of time.  Other examples of fl ows are expenditure, savings, depreciation, interest, exports, imports, change in inventories (not mere inventories), change in money supply, lending, borrowing, rent, pro fi t, etc. because magnitude (size) of all these are measured over a period of time.  A stock is a quantity that is measurable at a particular point in time, e.g., 8 p.m., 1st January, Monday, 2020, etc.  Examples of stocks are wealth, foreign debts, loans, capitals, inventories (not change in inventories), opening stock, money supply (amount of money), population, etc .