Models of Urban Growth

Question 1

income multiplier

Answer 1

increase of total income for every unit of export income gained

Question 2

employment multiplier

Answer 2

quantitiy of jobs born for every new job in the export sector

Question 3

labor demand curve

what’s shifting the curve to the right ?

downward sloping line

Answer 3

1)export demand increase
2)worker productivity increase

Question 4

labor demand curve

whats shifting the curve to the left?

downward sloping line

Answer 4

3) corporate and industrial tax increase
4) land use policy limiting the space for industry

Question 5

what will people drive away moving into the city?

Answer 5

residential taxes

Question 6

labor supply curve

what will make people draw into the city, leading the shift the curve to the right ?

1 monetary reason, 2 non-monetary reason

rises as wage climb so upward sloping line

Answer 6

1) higher wages
2) environmental quality
3) public services

Question 7

the Role of Public Policy in Economic Growth

in which way can the government influence economic growth ?

Answer 7

through 1) subsidies
2) mananging urban challenges like environmental quality
3) public transportation

Question 8

Name 4 Subsidy programs and explain them shortly

Answer 8

1) tax abatment/reduce (for new firms for some period of time)
2) industrial bonds (tax-free industrial bonds to finance property development)
3) government loans (to developers)
4) site development/Standortentwicklung (purchase land, clear it, build a road & sewer and then sell it to a developer for a fraction of the cost)

Question 9

name disadvantages from subsidies

Answer 9

lowering tax revenues could worsen public services

evidence that tax cuts + less public spendings lead to economic shrink

but tax cuts+ more public spending leading to economic growth

Question 10

what could be another incentive for subsidy progams?

Answer 10

lower tax burden will attract firms, increasing the tax revenues again on the long run so larger basis for public spendings

Question 11

benefits of economic growth

Answer 11

wages rise, more jobs created, variety of goods and services grows

Question 12

costs of economic growth

Answer 12

pollution, congestion, crime

Question 13

who benefits from econmic growth?

Answer 13

less educated worker, younger individuals and afro-americans + the city’s original residents, eöspecially the unemployed

but also boostering average income of the city as increased

employmengt raises wages, offers promotions & lowers unemploymentrates

Question 14

what is the primary driver of employment changes?

Answer 14

Business expansions and opening

closures play a smaller roll

Question 15

which role are legislation for business closures playing?

second the disadvantage

Answer 15

gives workers the opportunity to look for alternatives bc the laws require businesses to give advanced notice before closing or to pay severance

add a layer of complexity, potentially discouraging businesses from

hiring or offering competitve wages

Question 16

alternative strategies for regulators when businesses facing production issues

Answer 16

1) improving production efficiency
2) attracting new industries
3) subsidizes training and retraining for the change in labor conditions

Question 17

which 2 methos exist for forecasting economic growth?

Answer 17

1) economic base study
2) input-output analysis

Question 18

explain the economic base study

what is its purpose

Answer 18

assumption that a city’s export industries are the foundation. 1. step estimate location quotient, 2. step estimate employment multiplier

estimate the increase of total employment by the increase of export empl

Question 19

explain input-output analysis

derives a multiplier for each industry

Answer 19

generates a complete acocunting of the transactions between firms& households // calculates input coefficient to show the proportion of inputs needed to produce one dollar of output

used to estimate the multiplier effects

does not use location quotient, measures the exports directly

Question 20

what are the limits of the economic base study and input-output analysis?

Answer 20

1) constant multipliers
2) constant wages
3) outsiders determining the city’s fade
4) focus on exports

Question 21

whats the limitation of the location quotient

Answer 21

1) uniform consumtion patterns
2) national self-sufficiency
3) industry grouping