Principles of Macroeconomics / Unit 18 MAC 1720 short lesson, about 20 seconds
Stock Against Flow
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The idea
A flow is measured over a period; a stock is measured at a moment. Income, output, saving and the deficit are flows. Wealth, money, capital and the debt are stocks.
In practice
The deficit is one year's gap; the debt is the accumulation of all of them.
Where people slip
A falling flow still adds to the stock, which is why a smaller deficit raises the debt.
Your place on the trail
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