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| 1. |
Distinguish between stock and flow. Give an example of each. |
| Answer» <html><body><p></p>Solution : A stock variable is measured at one specific <a href="https://interviewquestions.tuteehub.com/tag/time-19467" style="font-weight:bold;" target="_blank" title="Click to know more about TIME">TIME</a>, and represents a quantity existing at that point in time (say, December 31, <a href="https://interviewquestions.tuteehub.com/tag/2004-289971" style="font-weight:bold;" target="_blank" title="Click to know more about 2004">2004</a>), which may have accumulated in the past. A flow variable is measured over an interval of time. Therefore a flow would be measured per unit of time (say a year). Flow is <a href="https://interviewquestions.tuteehub.com/tag/roughly-614920" style="font-weight:bold;" target="_blank" title="Click to know more about ROUGHLY">ROUGHLY</a> analogous to rate or speed in this sense. For example, U.S. nominal gross domestic product refers to a total number of dollars spent over a time period, such as a year. Therefore it is a flow variable, and has units of dollars/year. In contrast, the U.S. nominal capital stock is the total <a href="https://interviewquestions.tuteehub.com/tag/value-1442530" style="font-weight:bold;" target="_blank" title="Click to know more about VALUE">VALUE</a>, in dollars, of equipment, <a href="https://interviewquestions.tuteehub.com/tag/buildings-905283" style="font-weight:bold;" target="_blank" title="Click to know more about BUILDINGS">BUILDINGS</a>, inventories, and other real assets in the U.S. economy, and has units of dollars.</body></html> | |