question_answer

Give the differences between ex-ante savings and ex-post savings.

or

What do you understand by frictional unemployment and structural unemployment? Explain briefly.

 

Answer:

Differences between Ex-ante and Ex-post savings are :  

Basis	Ex-ante(Planned) Savings	Ex-post (Actural) Savings
Meaning	It refers to the desired level of savings.	It refers to the realized level of savings.
Reaction with investments	In an accounting year, planned saving may or may not be equal to planned investment.	In an accounting year, actual savings is always equal to actual investment. (This is according to the principle of National Income Accounting)
Determination of income	Equilibrium level of income is determined where planned savings is equal to planned investment.	Actual savings has no relevance in the determination of equilibrium level of income.

                                       or (i) Frictional Unemployment It is that unemployment which arises due to immobility of labour raw material, power, wear and tear of machinery, search of jobs. It is generally associated with changing jobs in the economy.                                                                (ii) Structural Unemployment It is that unemployment which results from long-term decline of certain industries. It arises when there is change in production technique. It also arises when labourers are trained in old and decaying industries and are not adequately equipped for new industries.