Question

Define flow.

Hint:

A flow variable is like a video; it's measured over time (e.g., income per month). A stock variable is like a snapshot; it's measured at one moment (e.g., wealth today).

Answer 1

In economics, a flow is a variable that is measured over a period of time. It has a time dimension. For example, national income is a flow because it is measured per year (e.g., \$20 trillion per year). Other examples include investment, consumption, exports, and a person's monthly salary. This is contrasted with a stock, which is measured at a specific point in time (e.g., a nation's capital stock on January 1st).