Deck 11: Economic Impact Analysis

Question 1

If local consumers spend 40 cents of each dollar of income locally, a $1 million direct spending project will produce how much local economic impact?

A)$1 million
B)1.4 million
C).4 million
D)$1.67 million

Answer 1

D

Question 2

The primary question to be asked regarding the economic impact of an event or institution is

A)How would the local economy differ if this institution or event did not exist?
B)How does the average local household benefit from this institution or event?
C)How much does the institution or event add to aggregate local earnings?
D)To what degree does the institution or event lead to future economic growth?

Answer 2

A

Question 3

The two main components of an economic base model are

A)Export goods and local services
B)Consumption goods and investment spending
C)Direct spending and multiplier effects
D)Supply and demand functions

Answer 3

A

Question 4

The main components of the multiplier effect are induced and indirect income.Induced income refers to

A)Income produced by spending on local materials, energy, etc.as part of operating expenses
B)Income produced by spending at local restaurants or stores as part of attending the institution or event
C)Income produced by spending by the institution's employees
D)Income produced by local businesses

Question 5

All of the following are criticisms of the New York Sports and Convention Center impact study EXCEPT

A)Added local spending estimates did not exclude local residents.
B)The center's proposed stadium would replace another local facility
C)The land had other, more valuable uses
D)The multiplier covered an area that included the current facility

Question 6

The formula for the Keynesian spending multiplier is (MPC is the marginal propensity to consume, MPS is the marginal propensity to save)

A)1/(1-MPC)
B)(1-MPC)
C)1/(1-MPS)
D)1/(MPC-MPS)

Question 7

Input-Output Models….

A)assume that each industry's output is comprised of a fixed set of inputs
B)are used almost exclusively for economic impact studies
C)are based on the Keynesian flow of income model
D)are rarely used in regional economic impact studies

Question 8

The economic impact of a university might include all of the following EXCEPT

A)Increased human capital in the state or region
B)The effects of student spending
C)The effects of employee spending
D)The net effects of the university on local government budgets
E)None.All of the above are possible parts of economic impact

Question 9

Criticisms of economic impact analysis include all of the following EXCEPT...

A)Emphasis on the local rather than national economy
B)Failure to consider effects on other areas
C)Often including capital or other costs as part of the positive economic impact
D)A lack of political interest in this type of analysis

Question 10

Direct spending for an audience-based project like a sports stadium or arts festival should include all of the following EXCEPT

A)Ancillary direct spending
B)Added earnings of local employees
C)Ticket revenue from non-local residents
D)Parking revenue

Question 11

Among the main economic concepts used in economic impact analysis are…

A)Supply, demand, and equilibrium
B)Opportunity cost, net benefits, and market efficiency
C)Direct spending, multipliers, and regional income
D)All of the above