Question

Distinguish between stock and flow variables with suitable examples.

Answer 1

Basis of Difference	Stock Variables	Flow Variables
Definition	A stock variable is measured at a particular point in time. For example, the bank balance as of 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.
Time Element	They do not have an element of time attached to them.	They have an element of time attached to them, such as 1 year, 6 months, 10 days, etc.
Nature	These are static in nature.	These are dynamic in nature.
Examples	Capital, Bank deposits, Water in a tank.	Capital formation, Interest on capital, Water flowing in a stream.