. Distinguish between stock and flow


Between net investment and capital which is a stock and which is a flow?

 

 

Best Answer

Explanation:

The differences between stock and flow are as follows:

 

Sl no.

Stock

Flows

1.

 

It means the quantity of an economic variable

that is measured at a particular point in time.            

It means the quantity of an economic variable

that is measured during a period of time.

2.

 

It has no time dimension as its magnitude is

measured at a particular point of time.  

It has time dimensions like per day,

per hour, month and year. 

3.

 

It is a static concept.

Examples - Wealth, bank deposits.,

a hundred rupee note. 

It is a dynamic concept. 

Examples- Income/ Investment. Interest on capital,

capital formation, monetary expenditure. 

 

Net investment is a flow concept because it measures over a period of time. 

Capital is a stock concept because it measures at a particular point of time. 

Final Answer:

Stock isis those variables whose quantity is measured at a particular point in time, whereas flows are those whose quantity is measured over time.

Net investment is a flow concept, whereas capital is a stock concept.

 

 

 

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