This is the final exam for Stocks & Flows. It pulls together the whole course: telling a stock from a flow in two seconds, the accumulation rule that governs every system that builds up over time, the deficit fallacy (a falling inflow is not a falling stock), the inertia that makes stocks slow and makes systems overshoot, and the five-question checklist you run to debug any of it. Several questions look easy until you notice a flow wearing a stock’s clothing, or an inflow that’s falling while its stock is still rising. Reason each one all the way through.
How this exam works
Read carefully — this exam is final. Each question appears one at a time. Once you submit an answer it is locked for good: there’s no going back, no retry, and no restart. Your score is hidden until the end, where you’ll see a pass/fail verdict. The pass mark is 70%. A few questions ask you to select all correct answers.
What is the cleanest distinction between a stock and a flow?
Select an answer to continue.
Course Recap
Big picture
Stocks & flows, in one picture
- Stocks & Flows
- Stock vs. flow
- Stock = a level you can photograph; flow = a rate you can only film. Count the "per times" in the unit.
- The accumulation rule
- Change in stock = inflow − outflow. A stock is the running total (integral) of its flows, so it smooths, lags, and remembers. Equal flows → flat stock.
- The deficit fallacy
- A falling inflow is NOT a falling stock. Inflow eases → stock still rising → peaks → falls. Reflex: is the inflow now below the outflow?
- Inertia & overshoot
- Stocks are slow; time ≈ gap ÷ net flow. A delayed reading → over-correction → overshoot. Inertia is also a buffer: stability vs. responsiveness.
- Debugging tool
- Stock? Flows? Net? Flow-as-stock? How long? You change a stock only through its flows or loops — fix the plumbing, not the puddle.
- Stock vs. flow
Key takeaways
Stocks and flows are the grammar of accumulation — the floor under all of systems thinking. Start by sorting every quantity into a stock (a level you can photograph) or a flow (a rate you can only film); the unit, with its “per time,” settles it. Then apply the one rule that governs everything that builds up: change in stock = inflow − outflow, which makes a stock the running total of its flows — so it smooths, lags, and remembers, and equal flows hold it flat at any level. Refuse the deficit fallacy: a falling inflow is not a falling stock, and the level keeps rising until outflow finally beats inflow. Respect inertia: stocks are slow (time ≈ gap ÷ net flow), their lag makes systems overshoot, and that same sluggishness makes them buffers that keep the world stable. Above all, remember where leverage lives — you change a stock only through its flows or the loops that drive them. Fix the plumbing, not the puddle.