Question
Which of the following asset belongs to the flow
concept?Solution
Income is a flow concept because it is measured over a period of time (length of time). Circular/low of income refers to continuous circular flow of money income. The concepts of stock and flow are used in more in macro economics or in the theory of income, output and employment. Money is a stock variable, whereas the spending the money is a flow variable. Wealth is stock, income is flow, saving by a person within a month is flow, while the total saving on a day is stock.
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