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Distinguish Between Stocks and Flows. Give Two Examples of Each. - CBSE (Arts) Class 12 - Economics

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Question

Distinguish between stocks and flows. Give two examples of each.

Solution

Basis of Difference

Stock Variables

Flow Variables

Definition

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.

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.

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Solution Distinguish Between Stocks and Flows. Give Two Examples of Each. Concept: Basic Concepts - Stocks and Flows.
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