Question

What is the key difference between planned (ex-ante) and actual (ex-post) demand?

Options

• Planned demand is what people buy; actual is what they intend

• Planned is intended spending; actual is real purchases, causing inventory changes if mismatched

• Planned ignores government; actual includes it

• Actual demand always equals exports

Answer 1

Planned is intended spending; actual is real purchases, causing inventory changes if mismatched

Explanation: 

Equilibrium occurs when planned demand matches actual demand; otherwise, unplanned inventory builds up or depletes.