Final answer:
Stock and flow are concepts used in economics and finance to distinguish between variables that represent a snapshot (stock) and variables that represent a change over time (flow). Net investment is a flow that represents the change in a country's stock of capital over time, while capital is a stock that represents the total amount of assets owned at a specific point in time.
Step-by-step explanation:
Stock and flow are concepts used in economics and finance to distinguish between variables that represent a snapshot at a specific point in time (stock) and variables that represent a change over time (flow).
In terms of net investment and capital, net investment is a flow while capital is a stock. Net investment represents the change in a country's stock of capital over a certain period of time, while capital represents the total amount of physical and financial assets owned by individuals, businesses, or governments at a specific point in time.
For example, if a company invests $1,000 in new machinery in a year, the net investment would be $1,000 as it represents the change in the company's stock of machinery over that year. On the other hand, the capital of the company would be the total value of all its assets at a specific point in time, including the machinery it already owned before the investment.