What do we mean by stock and flow concept?

What do we mean by stock and flow concept?

These terms are commonly used in macroeconomic national income accounting we have seen the meaning of national income and also basic conversion number for formulas under national income accounting

A stock is a quantity measured at a particular point in a time. For example on January 1, 2022 you have to 4000 rupees in your bank account in is a stock concept rupees 4000 not lying in the wallet of Raj Kumar student is also an example of stock variable. All such value or stock value as they are measured at a specific point of time. Other examples of the stock concept include capital, money supply, etc.

What do you mean by Flow Concept 

A Flow Concept is  quantity measured over a specific period. For example:- your  pocket allowance is 4000 rupees, per month on which you will get 8% interest by the bank so this value is a flow concept because they are measured over an hour, a month, an year.

Difference between stock and flow concept

 Stock

                      

• It refers to those variables which are
• measured at a particular point in time.

• It is not a time dimensional.

•  It is a static concept.

• Example:- the stock of good as on

                        1 January 2022

Flow

• it is measured over a period of time or during a month

• it is a time dimensional concept hai

• it is a dynamic concept

• example production of good during the month of January 2022

All examples of stock and flow concept

Stock concept example

• wealth
• water in a tank
• Bank deposits 
• capital
• machinery of a sugar mill 
• loan taken by a country from ROW
• Distance between Delhi and Chandigarh
• Rice store in a godown area
• Money supply

Flow concept example

• income
• investment
• water in a stream 
• interest on capital
• capital formation
• monetary expandincture like electricity
• production

Relation between stock and flow concept

They both are inter-related to each other. The stock has an influence over flow variable, that is, it can change the flow variable. For example, an increase in Bank deposit ( stock ) can cause an increase in the income of a consumer in the form of interest.