Chapter 4 Part 2 - Income Determination and Multiplier

Economics Class 12
Macroeconomics

We always take ex ante figures ( that is planned savings and investments)

Explanation

Ex Ante means 'Before the event'

and

Ex Post means 'After the event'

While Calculating equilibrium Point, we take Ex ante Savings and Investment

Ex Ante Savings

It refers to amount of saving which households plan to save a different levels of income

Ex Ante Investment

It refers to amount of investment which firms plan to invest at different levels of income

Only at equilibrium Point

Ex Ante Savings =EX ante Investment

This point is called equilibrium Point

## Why don't we take Exposit Savings and Investment?

It is because Savings will always be equal to Investment at all points of income

So we cannot calculate equilibrium point

### NCERT Questions

#### Question 2

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

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### Transcript

Difference between Ex Ante and Ex post Savings and Investment Ex Ante It is also called Intended or Planned or Voluntary or Desired It is taken into account while calculating equilibrium Point Only at equilibrium Point Ex Ante Savings = EX ante Investment Ex Post It is also called Realized or Actual It is not taken into account while calculating equilibrium Point At all levels Ex Post Savings = Ex Post Investments