Question

Which pairing correctly matches the demand concept with its area of use?

Options

• Income determination uses Ex-ante values, whereas National Income Accounting uses Ex-post values

• Income determination uses Ex-post values, whereas National Income Accounting uses Ex-ante values

• Both income determination and National Income Accounting use only Ex-ante values

• Both income determination and National Income Accounting use only Ex-post values

Answer 1

Income determination analysis works with planned (ex-ante) magnitudes, whereas National Income Accounting records what has actually occurred and therefore uses ex-post values. This distinction is central to Keynesian macroeconomics.