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Between net investment and capital which is a stock and which is a flow?

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Question

Between net investment and capital, which is a stock and which is a flow?

Short Answer
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Solution

  • Capital is a ‘Stock’: This is because capital (e.g., factory machinery, buildings) is measured by how much is available on a specific day or date.
  • Net Investment is a ‘Flow’: This is because investment is a new addition made to the capital stock within a year or a specific period of time.
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Chapter 2: National Income Accounting - Exercises [Page 33]

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NCERT Economics Introductory Macroeconomics [English] Class 12
Chapter 2 National Income Accounting
Exercises | Q 3. (ii) | Page 33
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