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19:19 Jan 10, 2016 |
English language (monolingual) [PRO] Bus/Financial - Economics / Macroeconomics | |||||||
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SUMMARY OF ALL EXPLANATIONS PROVIDED | ||||
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4 +2 | A flow variable is measured over an interval of time. |
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A flow variable is measured over an interval of time. Explanation: A flow variable is measured over an interval of time. Therefore a flow would be measured per unit of time (say a year). Flow is roughly analogous to rate or speed in this sense. https://en.wikipedia.org/wiki/Stock_and_flow -------------------------------------------------- Note added at 25 mins (2016-01-10 19:44:20 GMT) -------------------------------------------------- For example, U.S. nominal gross domestic product refers to a total number of dollars spent over a time period, such as a year. Therefore it is a flow variable, and has units of dollars/year. In contrast, the U.S. nominal capital stock is the total value, in dollars, of equipment, buildings, inventories, and other real assets in the U.S. economy, and has units of dollars. The diagram provides an intuitive illustration of how the stock of capital currently available is increased by the flow of new investment and depleted by the flow of depreciation. -------------------------------------------------- Note added at 28 mins (2016-01-10 19:47:45 GMT) -------------------------------------------------- http://www.economicsdiscussion.net/difference-between/differ... http://hspm.sph.sc.edu/courses/econ/classes/Stocksandflows/S... -------------------------------------------------- Note added at 29 mins (2016-01-10 19:48:40 GMT) -------------------------------------------------- Goods and services flow around any economy. "Flow" means that goods and services move from one person to another. In a hunter-gatherer economy, the flow may be done according to custom. In a market economy, the flow may be determined by the buy-sell deals people make. In any society, people are always doing things for each other and giving things to each other. This is the flow of goods and services. Stocks are also important to economic activity. Stocks do not flow. Rather, they build up or get depleted. Capital is a stock, not a flow. Capital = things people make to help them make other things. Capital builds up ("accumulates") or depletes ("depreciates"). |
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13 mins peer agreement (net): +2 |
Reference Reference information: Difference between flow variables and stock variables http://www.economicsdiscussion.net/difference-between/differ... -------------------------------------------------- Note added at 15 mins (2016-01-10 19:34:33 GMT) -------------------------------------------------- https://en.wikipedia.org/wiki/Stock_and_flow Economics, business, accounting, and related fields often distinguish between quantities that are stocks and those that are flows. These differ in their units of measurement. A stock variable is measured at one specific time, and represents a quantity existing at that point in time (say, December 31, 2004), which may have accumulated in the past. A flow variable is measured over an interval of time. Therefore a flow would be measured per unit of time (say a year). Flow is roughly analogous to rate or speed in this sense. For example, U.S. nominal gross domestic product refers to a total number of dollars spent over a time period, such as a year. Therefore it is a flow variable, and has units of dollars/year. In contrast, the U.S. nominal capital stock is the total value, in dollars, of equipment, buildings, inventories, and other real assets in the U.S. economy, and has units of dollars. The diagram provides an intuitive illustration of how the stock of capital currently available is increased by the flow of new investment and depleted by the flow of depreciation. |
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