What is the difference between stock and flow?
Stock refers to any quantity that is measured at a particular point in time, while flow is referred to as the quantity that can be measured over a period of time. Both the stock and flow are interdependent on each other.
There are a number of terms related to national income which are classified into stock and flow. For Example: While savings is stock, investment is a flow, the distance between two places is a stock, but the speed of the vehicle is a flow. Similarly, income is a flow, whereas wealth is a stock.
The amount of water that has flown into the tub over a period of time is a flow variable. An easy way to distinguish between flow and stock variables is that a flow variable is measured over a period of time while stock variable is measured at a specific point of time.
Likewise, investment (i.e., addition to the stock of capital) is a flow as it pertains to a period of time. Other examples of flows are: expenditure, savings, depreciation, interest, exports, imports, change in inventories (not mere inventories), change in money supply, lending, borrowing, rent, profit, etc.
A flow concept is a quantity measured over a specific period. For example; your pocket allowance is 1500 rupees, per month on which you will get 4% annual interest by the bank. So, this value is a flow concept because they are measured over an hour, a month, an year.
Capital is a stock concept which yields a periodic income which is a flow concept.
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.
Variables, which are measured at a point of time are called stock variables whereas variables measured over a period of time are flow variables. This means that stocks are non-recurring in nature whereas flows are recurring in nature. I found, that number of unemployed people is stock and amount of salary is flow.
Depreciation is a flow variable. Depreciation reflects the change in value over time and cannot be concretely measured like the assets it is...
STOCKS AND FLOWS IN MACROECONOMICS
Gross Domestic Product (GDP) represents the value of final goods produced by the economy during a given year. GDP is a flow that is measured in dollars, euros, or other currency units per year. GDP is an inflow to the stock of inventory in the economy.
Why is flow important?
Flow has a number of benefits. It is associated with increased happiness, higher intrinsic motivation, greater creativity, and better emotional regulation, among other positive effects.
- Select a task. If you want to enter flow, you need to select a task that's challenging enough to create a state of arousal. ...
- Develop proficient skills. ...
- Set clear goals. ...
- Eliminate distractions and frame your experience. ...
- Immerse yourself in the present moment.
Capital flows refer to transactions in financial assets between U.S. residents and residents of foreign countries. Financial assets include loans, bank deposits, drafts, acceptances, notes, government and private debt and equity securities, and intracompany accounts for the financing of direct investments.
The stock variable thus refers to the quantity or value of certain economic variables given at a point in time. Capital and quantity of money are some of the major examples of stock variables.
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.
Definition: A stock is a general term used to describe the ownership certificates of any company. A share, on the other hand, refers to the stock certificate of a particular company. Holding a particular company's share makes you a shareholder. Description: Stocks are of two types—common and preferred.
- Income Stocks. Income stocks are the least volatile classification of stocks and offer investors steady dividends. ...
- Penny Stocks. The term "penny stock” refers to shares that trade at no more than $5 each. ...
- Speculative Stocks. ...
- Growth Stocks. ...
- Cyclical Stocks. ...
- Defensive Stocks. ...
- Value Stocks.
STOCKS AND FLOWS IN MACROECONOMICS
Gross Domestic Product (GDP) represents the value of final goods produced by the economy during a given year. GDP is a flow that is measured in dollars, euros, or other currency units per year. GDP is an inflow to the stock of inventory in the economy.
| Stock | Flow |
|---|---|
| Examples | |
| Bank deposits, capital, wealth, population | Capital formation, income, interest on capital, depreciation |
Solution(By Examveda Team) Quantity demanded is a Flow concept. The quantity of the current production of a commodity which moves from a factory to the market is called flow. The aggregates of macroeconomics are of two kinds some are stocks, typically the stock of capital 'k' which is a timeless concept.
