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Consider flow through a pipe of varying cross-sectional area. The fluid velocity is related to the cross-section area by \begin{align} A_1 v_1 =A_2 v_2 \end{align}
This is called equation of continuity. It is valid for incompressible fluids. The equation of continuity is the same as the conservation of mass.
Statement 1: The stream of water flowing at high speed from a garden hose pipe tends to spread like a fountain when held vertically up, but tends to narrow down when held vertically down.
Statement 2: In any steady flow of an incompressible fluid, the volume flow rate of the fluid remains constant.
Solution: The statement 2 is same as the continuity equation, $Av=\text{constant}$, where $A$ is the cross-section area and $v$ is the fluid velocity. When pipe is held vertically up, the energy conservation makes $v$ to decrease as water goes up and hence $A$ increases by continuity equation. It is the other way around when the pipe is held vertically down.