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Investment can mean the amount a producer plans to add to his inventory, which may be different from what she ends up doing. Arrange the given case study considering this process of ex-ante to ex-post investment.

Arrange the given case study considering this process of ex-ante to ex-post investment.

(A) At the end of the year, his inventory goes up by Rs 70 only

(B) Due to an unforeseen upsurge in demand for his goods in the market, the volume of sales exceeds

(C) The producer plans to add Rs 100 worth of goods to his stock by the end of the year, which is his planned investment

(D) To meet this extra demand, he has to sell goods worth Rs 30 from his stock

Choose the correct answer from the options given below:

Solution

✅ Correct Option: 3

Option 3: (C), (B), (D), (A) -> This correctly arranges the sequence from ex-ante (planned) to ex-post (actual) investment. The process flows as: (C) Producer plans to add Rs 100 to inventory (ex-ante/planned investment) → (B) Unforeseen surge in demand occurs (unexpected event) → (D) Producer sells Rs 30 from stock to meet extra demand (unplanned disinvestment) → (A) Final inventory increases by only Rs 70 (ex-post/actual investment = Rs 100 planned - Rs 30 unplanned sale = Rs 70 actual). This demonstrates the difference between planned and realized investment due to unforeseen market conditions. -> correct

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