Distinguish between stock and flow. Between net investment and capital which is a stock and which is a flow? Compare net investment and capital with flow of water into a tank.
The main differences between stock and flow are being listed below –
Basis of Difference | Stock | Flow |
1. Meaning | Stock refers to quantity of a variable which is measured at particular point of time. | Flow refers to quantity of a variable which is measured over a period of time. |
2. Time | It has no time dimension | It has time dimension as per hour, per day, per month. |
3. Concept | It is static concept. | It is dynamic concept |
4. Example | Quantity of money, wealth, etc | Consumption, Investment, etc |
Suppose if we take example of water tank, the water level (capital) is stock because it can be measured at a point of time and flowing water into the tanks (investment) is flow because it is measured over a period of time.