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in Class 12 by kratos

What is the difference between ex ante investment and ex post investment?

1 Answer

+1 vote
by kratos
 
Best answer

Planned investment (Ex-ante) is the investment which is desired to be made by the firms and planners in the economy during a particular ** in the beginning of the **. As against it, the actual investment of a ** (e.g., a year) measured after the fact is called ex-post or actual investment. It needs to be noted that Keynes include in investment the inventories of unsold goods which he called unplanned investment. Thus actual investment equals planned + unplanned investment. Briefly put, planned investment is intended or desired investment whereas actual investment is equal to planned + unplanned investment. It should be kept in mind that sometimes investment is made which was not included in planned investment. This type of investment is called unplanned investment. Unplanned investment takes place when unsold finished goods accumulate due to poor sales. Thus actual investment of an economy is the total of planned investment and unplanned investment.

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