Economics and Finance Flashcards
NAICS
The North American Industry Classification System - used by business and government to classify and measure economic activity in Canada, Mexico, and the US. Six-digit code.
UDAG
Urban Development Action Grant 1978-1989 grants to cities and urban counties which are experiencing severe economic distress to help stimulate economic development activity needed to aid in economic recovery
Economic base analysis
looks at basic and non-basic economic activities
Location Quotient formula
local employment in industry “X” divided by total employment in area over national employment in industry “X” divided by total national employment
Basic activities
economic activity that can be exported, such as automotive manufacturing
Non-basic activities
economic activity that can not be exported, such as hair salons
Four main parts of economic development
- Retaining existing business and industry 2. attracting business 3. nurturing small and start-up business 4. developing and financing facilities that help capture business or recycle local funds
Economic development focused on ____ through the 70s but now focuses on ______
manufacturing jobs through the 70s but is shifting now toward service sector jobs, smaller businesses, and entrepreneurial ventures
10 leading economic indicators
unemployment, housing starts, Consumer Price Index (a measure for inflation), industrial production, bankruptcies, Gross Domestic Product, broadband internet penetration, retail sales, stock market prices, and money supply changes
Major geographic shifts based on economic activity
Move from older manufacturing towns to sun belt; Move from urban core to suburbs and exurbs - now in the midst of the back to the city movement; Large metro areas to non-metro communities
Small Business Administration (SBA)
makes loans directly to businesses and acts as a guarantor on bank loans. Also makes loans to victims of natural disasters, works to get government procurement contracts for small businesses assists businesses with management, technical and training issues.
Grant Thornton
business climate rankings of the 48 states - NC rated top business climate
Push analysis
determines sales capacity of a market area; it determines if the introduction of a new business will generate additional customers.
If location quotient is greater than 1
area is exporting this good or service
If location quotient is less than 1
area is importing this good or service
Shift-share technique
Allocates a portion of the projected expansion to sub-regions or population centers based on the center’s present share of the employment
Title 32 District
metro district to provide ambulance services, fire protection, hospital, mosquito control, park and recreation, safety protection, sanitation, street improvements, and television. General Improvement District
Gross national product and gross domestic product
value of all final goods and services produced in a country in one year (gross domestic product) plus income that residents have received from abroad, minus income claimed by nonresidents
Operating budget
Everyday expenditures, keeping the lights on, employees, utility bills, etc.
Capital budget
Long-term purchases, such as buildings, infrastructure , etc.
Capital Improvement Program
5-10 year plan for things that will be completed over time, how they will be financed, etc.
Line-item budgeting
basic budget, costs of activities projected and inflation is added.
PPBS budgeting
Planning, Programming, Budgeting, Systems - based on accomplishing goals set by each department
ZBB
Zero Based Budgeting - department starts with zero, and every request for funds is evaluated for it’s impact on “the mission.” Decision packages are created.
Performance Based Budgeting
Funding increases as departments meet set goals i.e. the planning department gets more money for plan review as they successfully review a certain number of plans.
Pay as you go finance
Financing where budgetary restrictions demand paying for expenditures with funds that are made available as the program is in progress
Reserve funds
funds reserved for future purchases
Revenue Bond
use revenue from the thing you bonded for to pay off the bond. Good example is baseball stadium
TIF
increase in tax revenue used to construct improvements
Special Assessments
specific group is assessed to pay for a specific improvement i.e. upgraded landscaping on a specific city street. Street residents are assessed to pay for the upgrades.
Lease purchase
“rent to own” when government doesn’t want to borrow money to fund big improvements, they are ready to pony up i.e. new park equipment
Progressive tax
rate increases as income rises - i.e. tax the rich more than the poor. Income tax brackets
Proportional tax
rate is equal regardless of value - i.e. property tax is 10% if you own a million dollar house or a 100,000 dollar house
Regressive tax
Tax rate decreases as income rises - i.e. cigarettes - I have $10 of disposable income, and tax is $1. it’s 10% of my budget. If I have $20 of disposable income, and tax is $1, tax is 5%. Person with more money has a decreased rate.
E government
The use of information and communication technology to provide and improve government services, transactions and interactions with citizens, businesses, and other arms of government.
Telecommunications Act
1996 Clinton the first major overhaul of US telecommunications law in nearly 62 years, amending the Communications Act of 1934
New Markets Tax Credits
provides tax credit incentives to investors for investing in communities that are economically distressed or have low-income populations
Telecom hotels
A building that houses hundreds and thousands of web servers for web hosting organizations, large enterprises, and other service organizations
Coupon rate
It is the interest rate that a bond issuer will pay to the bondholder. If you hold $10,000 nominal of a bond described as a 4/5% loan stock, you will receive $450 in interest.
NAFTA
North American Free Trade Agreement
Input-output analysis
Shows how the output of one industry is an input to each other industry
Fiscal impact study
efforts to estimate the budgetary effects of various types of land uses on local governmental jurisdictions or other local service providers
Average per capita method
Take the budget for a town, divide by the number of constituents to determine per capita expenses for the town. Take how many people new development will bring, multiply by average to determine entire fiscal impact.
Adjusted per capita method
Adjusts average based on expectations (subjective)
Disaggregated per capita method
Assumes fiscal impact based on costs of different land uses i.e. retail vs. residential
Dynamic method fiscal study
uses statistics and time, accounts for sales tax
Cost-benefit analysis
ratio of cost to complete project vs. financial benefit of project. Everything must be put in monetary value, which is hard with environmental and social
Cost-effective analysis
CE ratio = (cost new strategy - cost current practice)/(effect new strategy - effect current practice)
Revolving loan fund
a pool of public and private sector funds that recycles money as loans are repaid
General Obligation bonds
bonds are issued after approval by voters. Tax revenue is then used to pay back bonds.
