Suppose the producers plans to add ₹ 100 cr worth of goods to her stock by the end of the year. However, due to an unforeseen upsurge of demand for her goods in the market, she had to sell goods worth ₹ 30 cr from her existing stock.
Now, determine Ex-ante Investment and Ex-post Investment from the above information.
Answer & explanation
Correct answer: option 2
The correct answer is: 100 Cr, 70 Cr.
Ex-ante investment refers to planned investment, while ex-post investment refers to actual investment after considering unforeseen events. In this scenario:
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Planned Investment (Ex-ante): ₹100 Cr (as the producer initially planned to add ₹100 Cr worth of goods to her stock).
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Actual Investment (Ex-post): ₹70 Cr (since she had to sell goods worth ₹30 Cr from her existing stock due to the unforeseen upsurge in demand)