Question
Distinguish between stock and flow variables with suitable examples.
| 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 ₹ 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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| National Income | = | ₹ 2,000 |
| Autonomous consumption expenditure | = | ₹ 200 |
| Investment expenditure | = | ₹ 100 |
| National Income | = | ₹ 500 |
| Marginal Propensity to Save | = | 0.30 |
| Investment expenditure | = | 100 |