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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.
From the following data, calculate Personal Income and Personal Disposable Income.
Rs (crore) | |
(a) Net Domestic Product at factor cost | 8,000 |
(b) Net Factor Income from abroad | 200 |
(c) Undisbursed Profit | 1,000 |
(d) Corporate Tax | 500 |
(e) Interest Received by Households | 1,500 |
(f) Interest Paid by Households | 1,200 |
(g) Transfer Income | 300 |
(h) Personal Tax | 500 |