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Shift 16/06/2023 3:30 PM - 6:30 PM
Correct Answer
The distinction between flows and stocks in economics is essential to understanding economic concepts. Here's the reason why the options are categorized as flows or stocks:
1. Bank deposits: Bank deposits represent the amount of money held in bank accounts, and this amount can change frequently as people deposit and withdraw money from their accounts. It is a stock because it represents the movement of money at a point of time .
2. Wealth: Wealth is a stock concept. It represents the total accumulation of assets and resources at a specific point in time. It doesn't represent a movement over time, but rather the total value of assets and resources at a particular moment.
3. Capital: Capital is also a stock concept. It represents the total assets (such as machinery, buildings, etc.) used in the production of goods and services at a specific point in time. It doesn't represent a flow as it's a snapshot of the total assets, not a movement over time.
4. Depreciation: Depreciation is a flow concept. It represents the decrease in the value of capital assets over time due to wear and tear or obsolescence. It is measured as a rate of change over time, so it's considered a flow.
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