Interest in a bank account illustrates the concept of stocks and feedback loops as it shows how changes in one element of a system can affect other elements. In this case, the amount of money in the bank account (the stock) can increase or decrease due to the addition or subtraction of interest (the flow). This change can then affect the behavior of the account holder, who may decide to deposit or withdraw more money based on the new balance. This is a feedback loop as the change in the stock affects the flow, which in turn affects the stock again.
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How do you avoid wasted time, money, and resources from short-sighted decisions? When you think in systems, you can learn to recognize the relationshi...
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Stocks are the "foundation" of a system and are the element that you can see, feel, count, or measure. A feedback loop is formed when changes in stock affect the flows into or out of that same stock. A prime example of this concept is interest as it relates to the amount of money in a bank account. Likewise, if you see less money in your account, you might react and take more work and thus the cycle continues.
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