Deck 14: Economic Development

Question 1

In the realm of international trade, states perform which of the following important roles in export promotion?

A)Brokering information
B)Offering technical support
C)Providing export financing
D)All of these choices.

Answer 1

D

Question 2

If a city or state aggressively recruited industrial businesses with tax breaks, public subsidies, and low wages, it was said to be engaged in what activity?

A)Venture capital
B)Small-business incubation
C)Enterprise zoning
D)Smokestack chasing

Answer 2

D

Question 3

According to the widely read book, The Rise of the Creative Class , economic development is driven by a demographic that seeks "cool cities." These cities have which of the following characteristics?

A)Economies that are knowledge-based, policies that promote social tolerance, and are communities that nurture the arts and culture
B)Economies that are manufacturing-based, policies that promote social tolerance, and are communities that nurture the arts and culture
C)Economies that are knowledge-based, policies that promote social isolation and intolerance, and are communities that nurture the arts and culture
D)Economies that are knowledge-based, policies that promote social tolerance, and are communities that nurture traditional entertainment venues like sports teams and bowling

Answer 3

A

Question 4

State government is involved in promoting states as a place for foreign investment. According to the U.S. Bureau of the Census,

A)the value of foreign-owned property, plants, and equipment in the states has been overstated.
B)more than 5.5 million jobs are a direct result of foreign investment.
C)California ranks at the bottom with respect to jobs that result from foreign investment.
D)the enactment of the North American Free Trade Agreement (NAFTA)has increased foreign investment in the United States because of the low cost of labor and the support of American labor unions and their workers.

Question 5

Economies are dynamic. Which factors below are not considered leading indicators that can be combined into a useful index of economic momentum?

A)The personal income growth in a state
B)The change in unemployment rates
C)The number of new babies born each year
D)The level of population change

Question 6

When Mercedes Benz was scouting for a site for a new assembly plant, thirty-five states expressed interest. Eventually, Alabama was selected. Once the final cost of incentives was tallied it came to $ __________ per new job.

A)88,000
B)49,500
C)179,000
D)132,000

Question 7

Which of the following states are not considered in the top 10 of the "new economy" states?

A)Massachusetts
B)Washington
C)Arkansas
D)Maryland

Question 8

Public debate over incentive packages that are offered by government to attract business revolves around questions

A)of how to make them most attractive.
B)of what effect new businesses will have on existing, protected industries.
C)about the value of amenities and subsidies that are provided.
D)about whether competitive behavior in seeking business relocation is counterproductive because eventual returns may not be worth the initial costs.

Question 9

The fourth wave of economic development and strategies emphasizes

A)globalization and human capital.
B)attracting heavy industries (like steel mills and automobile assembly plants)back into the United States.
C)following what has been termed the "balancing agriculture with industry" plan.
D)the need for public-private partnerships because states cannot afford to provide additional tax breaks due to budgetary problems.

Question 10

Geographically concentrated firms that compete and trade with each other and have similar needs are called?

A)Enterprise zones
B)Clusters
C)Start-ups
D)Small business incubators

Question 11

Incentive packages to encourage business relocation

A)include promises that nonnational governments rarely keep.
B)always include tax breaks, low-interest loans, and construction of infrastructure needed to support business operations.
C)may include tax breaks, low-interest loans, and construction of infrastructure needed to support business operations.
D)are limited by recent regional agreements about the construction of infrastructure needed to support business operations.

Question 12

According to at least one study of the impact of sports stadiums on local economies, the impact of such stadiums is

A)negligible.
B)profoundly positive.
C)profoundly negative.
D)They are a driving force in attracting the creative class.

Question 13

Denver's new opera house, Chicago's Millennium Park, and St. Louis' Citygarden are examples of which of the following that frequently contribute to business-relocation decisions?

A)Clusters
B)Sports Tourism
C)Amenities
D)Accommodations

Question 14

Second-wave economic development strategies are characterized as primarily depending

A)on chasing smokestacks from outside your own region of the country.
B)on luring business from elsewhere with tax breaks and public subsidies.
C)on a search for adjustments and new initiatives under the direction of private-sector leadership.
D)on establishing venture capital pools, creating small-business incubators, and initiating work-force training programs.

Question 15

A number of states are using travel and tourism as economic promotional tools. This strategy is especially appealing because

A)tourists are virtually captive spenders who will pay the taxes assessed because they have no choice.
B)the nation's population is aging with more time and money to travel.
C)tourism provides many decent jobs for non-college educated workforce.
D)All of these choices.

Question 16

As a political issue, economic development is

A)a partisan issue that only Republicans support.
B)a consensus issue that everyone favors.
C)a Democratic issue because it relates to jobs for blue-collar and minority workers.
D)largely ignored by candidates because all sides agree it is important.

Question 17

Statistics show that between _________ and _________ percent of new jobs come from existing firms expanding in their home state and start-up businesses-not from relocating businesses.

A)30; 40
B)10; 30
C)50; 60
D)80; 90

Question 18

Strategic planning is a useful tool for governments coping with economic development questions because it produces a

A)plan to which all government actors are committed.
B)common understanding of economic circumstances, permits development of a consensus about the economy, sets the stage for action, and provides a mechanism for adjusting and correcting the state's actions to match emerging economic trends.
C)plan that, if followed, leads to an expanded economy.
D)lengthy document that lists all resources in the community that might aid in an economic recovery.

Question 19

Moving economic development programs from state agencies and into private organizations is one of the key characteristics of which approach to economic development?

A)First wave
B)Second wave
C)Third wave
D)Fourth wave

Question 20

Providing business a role in governmental economic development planning and implementation efforts is

A)sometimes controversial because government may be accused of being too receptive to business interests.
B)always in the public interest.
C)one of the hallmarks of the first wave of economic development efforts.
D)universally welcomed by state officials and legislators.

Question 21

Richard Florida believes that, in response to "cool" cities becoming places where creative people flock to, those very people will eventually see that it's not 'new' or 'cool' anymore to live in a popular place, and will move on to some other less-well-known place, thereby making government efforts to spruce up cities for them useless.

Question 22

State governments have largely tried to ignore business leaders, knowing that all they want to do is get government subsidies of some sort or another that has negligible public value.

Question 23

The economic playing field is the world, not the neighboring county or state.

Question 24

After a bidding war among four states, Volvo selected South Carolina as the site of its new $500 million factory after receiving $200 million in state incentives.

Question 25

Critics of economic competition have called instead for the increase of cooperation. These efforts have been

A)largely successful
B)largely unsuccessful
C)dealt with by the Courts
D)abandoned as gentrification occurs

Question 26

The United States was once a nation of diverse regional economies but, due to the power of the national economy, most state economies are fairly similar today.

Question 27

Some local governments have adopted an approach to economic development called linkaging, in which

A)they use large-scale commercial development projects to accomplish social objectives.
B)those who profit as developers must agree to share profits with the campaign war chest of local officials.
C)local government and developers share in the cost of projects.
D)local government treasuries share in the developers' profit.

Question 28

The second wave of community efforts to spur economic development came when the Federal Government stepped in to nationalize many industries outright.

Question 29

The first wave of government-encouraged economic development began with the Great Depression, as states tried to float bonds to support industry.

Question 30

Travel and tourism are big businesses for many states, creating roughly $124 billion in tax revenue.

Question 31

The fourth wave of government-facilitated economic growth involves what some are calling a 'neo-socialism,' where a knowledge-based economy is combined with heavy governmental intervention in terms of high-tech infrastructure, health care, and social welfare programs.

Question 32

To gauge whether economic development subsidies are working as anticipated, states are encouraged to

A)build evaluation of incentives into policy and budget debates.
B)use solid data and analysis to measure the economic impact of incentives.
C)clarify the goals of incentives.
D)All of these choices.

Question 33

Some believe that industry-university collaboration can mean future economic success, particularly in terms of bioscience.

Question 34

In some states, one successful partnership to stimulate economic development is between industries and universities.

Question 35

Economic development is a process by which a community, state, or nation increases its level of per capita income, high-quality jobs, and capital investment.

Question 36

Because the second wave of government-sponsored economic development was deemed to be marginal, a third wave came where government let private businesses do more than before, and the government would only provide some direction and startup capital.

Question 37

Once an economic development strategy is in place, the next challenge is trying to surmount the huge level of pushback that occurs from vested interests trying to resist change.

Question 38

Concerns over the high costs of some economic incentives have led to the use of

A)gentrification, whereby a subsidized firm must pay interest on incentives for a prescribed number of years.
B)agreements between jurisdictions that result in blackballing firms that fail to live up to their agreements.
C)a referendum, by which the voters decide what incentives are to be extended to firms considering relocating in the jurisdiction.
D)clawbacks, whereby a subsidized firm must repay all or part of a subsidy if the firm fails to deliver on its promises.

Question 39

Jurisdictions compete for major investments such as automobile manufacturing facilities, and that competition has

A)created multistate or regional cooperation.
B)caused the value of incentive packages to increase.
C)forced the federal government to serve as a referee in interjurisdictional disputes.
D)caused the value of incentive packages to decrease.

Question 40

Business leaders believe that because their success is central to a state's economy, they ought to be treated as a public-interest rather than as a special-interest group.

Question 41

While some have strongly criticized states for spending too much money and making too many concessions to attract industry, most jurisdictions support strong incentives as necessary to grow jobs because they cannot afford not to do so.

Question 42

You are the economic development secretary for your governor who is running for re-election. Outline your five point plan for economic development that reflects the political culture of your state, the needs of the new economy, and the fiscal limits of your current tax structure.

Question 43

Through their strategic planning process to stimulate economic development, many states have identified travel and tourism, the arts, sports, and international trade promotion for emphasis. Why are these four areas so popular? Pick any two and explain how they can be used by nonnational government to encourage economic development. Are they overrated? Identify any weaknesses, if any, that are associated with their use.

Question 44

A robust economy provides jobs for residents and revenues for governments. Therefore, economic health is a broad public policy concern. The fundamental question is: Do state and local government efforts make a difference? Discuss the various arguments for and against, identifying at least two types of efforts that make a difference. How would you evaluate the success of each of these efforts?

Question 45

Inherent in the concept of economic development is the belief that developing the economy of a state or community enhances the quality of life for its citizens and generates more revenues for the government.

Question 46

New York City has provided over $200 million in tax breaks and utility concessions to keep Chase Manhattan Bank in the city.

Question 47

Accommodations taxes are taxes on hotel or motel room occupancies, with the revenues usually earmarked for tourism-related issues.

Question 48

Economic development efforts have been described as having four waves. Discuss each, and note how each wave approaches economic development efforts differently. In doing so, speculate on the success of fourth wave efforts in the new economy.

Question 49

One recent study on the impact of sports stadiums on local economies found that the stadiums had notable positive effects on jobs and development; stimulating a wide cross-section of professional service and entertainment/restaurant-related jobs.

Question 50

High-tech industries are helping shape the new economy and making states and local governments rethink economic development strategies, partly because high-tech firms can locate almost anywhere and are motivated by quality of life and workforce issues.

Question 51

A robust economy provides jobs for residents and revenues for governments.

Question 52

Attracting the "Creative Class" has become an important goal of cities in their pursuit of economic development. Describe the creative class, what is meant by "cool cities" and how cities' and states' policies might help attract this demographic?

Question 53

According to U.S. Travel Association figures, spending by travelers (tourism)is around $813 billion annually in 2011 and finances 7.5 million jobs.

Question 54

Clawbacks are requirements that firms repay a government for any subsidies they receive if the firms fail to deliver on their promises.

Question 55

States with a heavy reliance on low-wage, low-skill industries have the most to fear about a NAFTA-inspired job drain.