Giving Reasons Categories the Following into Stock and Flow - Economics

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Giving reasons categories the following into stock and flow:-

(i) Capital

(ii) Saving

(iii) Gross domestic product

(iv) Wealth

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Solution

i. Capital: Capital is a stock variable because it is a quantity measured at a particular period of time.

ii. Saving: Saving is a flow variable because it is a quantity measured over a specified period of time (If it is given as savings, then it will be considered a stock concept which accumulates money at a particular point of time).

iii. Gross domestic product: Gross domestic product is a flow variable because it is a quantity measured over a specified period of time.

iv. Wealth: Wealth is a stock variable because it is a quantity measured at a particular period of time. It includes accumulated past savings and income not spent.

Concept: Basic Concepts - Stocks and Flows
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2012-2013 (March) Delhi Set 1
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