A financing gap refers to the difference between the amount of investment needed to achieve sustainable economic growth and the savings rate within an economy. In other words, it represents the shortfall in investment that needs to be filled by outside sources, such as foreign direct investment or international aid.

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A Financing Gap Is

Question 115

Multiple Choice

A financing gap is:

A) the difference between the savings rate within an economy and the amount of investment needed to achieve sustainable growth.
B) the extra savings a country has beyond that needed to achieve sustainable growth.
C) the difference in the amount of investment dollars coming in to a country and the amount of investment dollars going out of a country.
D) the extra investment developing countries need in foreign aid to sustain their current rate of growth.

Correct Answer: