1.

Distinguish between stocks and flows. Give an example of each.

Answer»

Stocks are variables measured at a point of time whereas, Flows are variables measured over a period of time.

Example- Stock – Capital and Wealth

Flow – Income per month

Investment per year.

S.No.StockFlow
(i)Stock is that variable which is measured at a particular point of time for example i.e., your savings on 1st Jan. 2010 are 11,000Flow is that variable which is measured over a period of time for example i.e., your pocket expenses of t 20 per day.
(ii)The stock is not time dimensional.Flow is time-dimensional as Per hour, per month or per year
(iii)Stock influences the flow. Creator the stock of capital, greater is the flow of goods and servicesFlow influences the stock e.t., morrthiY increase in the supply of money leads to an increase in the quantity of money
(iv)Some concepts in economics do not have their stock aspect i.e., exports and imports.Imports and exports are used only as flow concepts.


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