What is ex-ante aggregate (planned) demand for final goods? Explain its determinants (measures).

(a) Ex-ante (planned) Aggregate demand. In a two-sector (Household and Firm) economy, ex-ante aggregate demand (AD) for final goods is the sum total of ex-ante consumption expenditure (C) and ex-ante investment expenditure (I) on final goods. Thus AD has two main determinants (measures) C and I which are explained below. Symbolically:
AD = C + I
(i) Ex-ante Consumption Expenditure. This refers to planned (or desired) consumption expenditure of households. Consumption function is represented by , where  indicates autonomous consumption (i.e., consumption expenditure wnen income is zero;, b shows marginal propensity to consume (MPC) and Y stands for level of income. Remember, consumption demand is the total expenditure which all the households in the economy are willing to incur on purchase of goods and services for their personal consumption,
(ii) Ex-ante investment expenditure. This refers to planned investment expenditure of private firms. For simplicity, we assume a constant price and constant rate of interest over short period to determine ex-ante (planned) investment expenditure. Hence firms plan to invest same amount every year, i.e.,  where  represents autonomous investment (i.e independent of income). Remember, investment demand refers to private planned (ex-ante) investment expenditure by the firms.
It should be kept in mind that in theory of determination of output (income), all variables are planned (ex-ante) variables.