Is Money Stock or Flow Variable ?
Example
Suppose I have Rs 50000 in my bank account as on 1 Jan
I spent 10000 during the month of January
Now I am left with 40000 as on 31 Jan
What is Stock and Flow in above case?
Bank Balance
as on 1 January
Cash Withdrawn
During January
Bank Balance
as on 31 January
It is Stock (Measured at
Particular Point of Time)
It is flow (Measured
over a period of time)
It is Stock (Measured at
Particular Point of Time)
Difference Between Stock and Flow
Stock
It is variable measured at a
Particular Point of time
Example –
Bank balance as on 31st Jan
It is variable measured over
a period of time
Period-
Cash withdrawn during January
Flow
What is Money Supply in an Economy
What is Money Supply?
It is total stock of Money
in circulation with public
at a particular point of time
Example
As per RBI Press Release,
total money supply
as on 31 March 2021
was Rs 188 Lakhs Crores Is Money Supply Stock or Flow?
Money Supply is Measured
at a Particular Date
So it is a Stock
CA Maninder Singh is a Chartered Accountant for the past 13 years and a teacher from the past 17 years. He teaches Science, Economics, Accounting and English at Teachoo
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