Stock variables: whose magnitude is measured at a particular point of time are called stock variables. For example, in business accounts, a magnitude of capital employed by a firm is measured on the last day of the financial year, say, capital as on 31st March 2015. This is the position of all the variables entering into the balance sheet, i.e. all assets and liabilities. By this criterion, capital, wealth, inventory, etc. are all stock variables.
Flow variables: whose magnitude is measured over a period of time are called flow variables. For example, when we talk of income, we say income during the month, or during the year. Similarly, we describe the magnitudes of the variables like output, expenditure, investment, intermediate costs, net change in stocks, etc.
