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What are flow variables in economics?

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Quick Answer

A flow variable in economics is a quantity that is measured over a time period. This is in contrast to stock variables, which are measured at a specific time. Flow variables can be measured over any time period but the most common include day, week, month, quarter and year.

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Full Answer

Flow variables describe many types of services and goods. A flow variable is useful as it allows economists to compare performance over time periods. Some common examples of flow variables include a person's yearly salary, interest, exports and rent. Any quantity that includes a time reference such as "per hour" or "per month" is a flow variable.

An important example of a flow variable is a country's national income. This is a measure of all the goods and services that are sold during a calendar year. By describing this quantity as a flow variable with a fixed interval of a year, economists can quickly compare how a country's national income is changing over time.

Stocks are another type of variable in economics. A stock does not have an element that is measured over time like flow variables. Instead, economists take a specific measurement of a stock at a fixed moment. Examples of stock variables include loan quantity and population.

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