11. Deficiencies of government investments including infrastructure and human ca

Question

11. Deficiencies of government investments including infrastructure and human capital that are complementary to- raise the rate of return from- private investment is called, a. Savings Gap b. Fiscal Gap c. Foreign-exchange Gap d. Poverty Gap 12. The Shortfall that results when the planned trade deficit exceeds the value of capital inflows, causing output growth to be limited by the available foreign exchange for capital goods imports is called, a. Savings Gap c. Foreign-exchange Gap d. Poverty Gap

Explanation / Answer

Answer.)

Q11.) b.) Fiscal Gap

The “fiscal gap” measures the extent to which the government’s commitments (e.g., spending, debt obligations) exceed its resources (e.g., revenues) over a period of time. It can also be used to estimate how much noninterest spending must decrease or how much revenue must increase for the federal government to reach an assumed
debt-to-GDP ratio by the end of a time period.

Q12.) c.) Foreign-exchange Gap

Foreign exchange gap is When a country's balance of payments on current account deficit is greater than the value of capital inflows.

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