A stock variable is measured at a particular point of time. For example, bank balance as on October 01, 2010 is Rs 5000. A flow variable is measured over an interval of time. For example, interest earned on bank deposits for 1 year, i.e. from October 01, 2009 to September 30, 2010.
What is an example of a flow variable?
Examples of flow variables include income, budget deficits, investment expenditure, sales revenue and gross profit. When thinking about these variables, these are things that change frequently and may have substantial rates of changes over time as well as large amounts of change over time.
Is money supply a stock variable?
Money supply is a stock variable because it is expressed at a particular point of time.
How is a stock variable different from a flow variable?
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).
Which is an example of a flow economic variable?
A flow economic variable is measured over an interval of time. Hence, it is measured per unit of time (year, quarter, month). For example, one can state that his/ her annual income is $100,000 per year. Therefore, we can conclude that income is considered as a flow variable.
What are the concepts of stock and flow?
The concepts of stock and flow are variables that have mutual dependence both to each other as well as to other variables. Flow variables refer to variables that are measured over a period or per unit of time. The time can be whatever it is defined as in the system that is being measured. It could be hours, days, weeks, months or years.
Is the national income a stock or flow variable?
For instance, national income in 2018 can be interpreted as a stock variable – as a measure at a point in time – for the year of reference even though it is a flow variable. Similarly, employment can be treated as a flow variable when it is viewed regarding work effort per staff hour.
