Question

Desired (ex-ante) demand and actual (ex-post) demand may differ due to:

Options

• Changes in the money supply

• Unplanned inventory changes

• Government budget deficits

• International capital flows

Answer 1

Desired and actual demand may differ due to unplanned inventory changes. When actual sales do not match what firms planned, inventories change unintentionally, creating a gap between planned and realized expenditure.