9. Differentiate between ex ante and ex post investment.pls answer as soon as possible.

Concept of Ex-Ante and Ex-Post

The various terms and variables used in the concept of aggregate demand and national income accounting can be used in a dual sense i.e. in terms of their actual values and in terms of their planned values.

When the actual values of the variable are taken into account, then it is called the Ex-Post measure of these items.

As against this, when the planned or the desired values of the variables are taken into account, then it is called the Ex-Ante measure of these items. For example, if a student at the beginning of the academic year of Class-XII aims at scoring 90 marks in economics, but if he/she scores 95 in the final exam, then90 is regarded as ex-ante measure and 95 is regarded as ex-post measure.

 

Economic Example of Ex-Ante and Ex-Post

 

Private consumption may be expressed in terms of what people actually consume during a given period (ex-post consumption expenditure) or it can also be expressed in terms of what they had planned to consume in the same period (ex-ante consumption expenditure).

Similarly, private investment can be expressed in terms of what the private investors actually added to the stock of capital in a given period (ex-postinvestment) or in terms of what they had planned to add to the stock of capital in the same period (ex-ante investment). Let us suppose that at the beginning of a period, a producer plans an inventory accumulation of Rs 500. However, due to unforeseen increase in the demand he has to lower the inventory stock and at the end of the period, his actual addition to the inventory stock is only worth Rs 400. Thus, in this case, the ex-ante investment is Rs 500, while theex-post investment is Rs 400.

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thanks..........

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ur welcm:))

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