Question
Stock and Flow
Answer :
Word Count : 443
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Skip in 10
Difference between Flow Variables and Stock Variables are as follows:
The distinction between a stock and a flow is very significant and we should clearly understand it since national income itself is a flow.
The basis of distinction is measurability at a point of time or period of time. Be it noted that both stocks and flows are variables. A variable is a measurable quantity which varies (changes).
(a) Flow Variables:
A flow is a quantity which is measured with reference to a period of time. Thus, flows are defined with reference to a specific period (length of time), e.g., hours, days, weeks, months or years. It has time dimension. National income is a flow.
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