If the stock of aggregate spending in the economy exceeds the capacity of the productive sector to respond by producing extra real goods and services then inflation is inevitable.
Answer: False
The answer is False.
Spending definitely equals income and too much spending relative to the real capacity of the economy to absorb it will create inflation. But those facts do not relate to the point of the question, which is, in fact, a very easy test of the difference between flows and stocks.
All expenditure aggregates - such as government spending and investment spending are flows. They add up to total expenditure or aggregate demand which is also a flow rather than a stock. Aggregate demand (a flow) in any period and it jointly determines the flow of income and output in the same period (that is, GDP) (in partnership with aggregate supply).
So while flows can add to stock - for example, the flow of saving adds to wealth or the flow of investment adds to the stock of capital - flows can also be added together to form a "larger" flow.
For example, if you wanted to work out annual GDP from the quarterly national accounts you would sum the individual quarterly observations for the 12-month period of interest. Conversely, employment is a stock so if you wanted to create an annual employment time series you would average the individual quarterly observations for the 12-month period of interest.
The question thus tests the precision of language as they relate to economic concepts. Too often the language is loose and the concepts become confused as a result.
The following blog may be of further interest to you: