Suppose Your Community Is Considering Using Public Money to Build

question 2

Multiple Choice

Suppose your community is considering using public money to build a new sports stadium for the team that is already in the community and unlikely to ever leave. Suppose you are watching a news broadcast in which the supporters are saying that it will enhance economic activity because of the increase in restaurant activity that will occur around the new stadium. Now suppose you hear that an independent economist is going to appear during the next segment. It is likely she will say

• A)the jobs created in the area will make it worth the investment.
• B)there will be no new jobs created.
• C)there will be no new jobs created in net because there will be about the same number of restaurant jobs lost near the old stadium as gained near the new one.
• D)It may be a short-term cost, but in the long term it will be worthwhile.

---

Definitions:

Acquisition

The process by which one company takes over another company to control its assets, operations, and management.

Field Warehousing

A logistics strategy where a third-party warehouses goods on the property of the producer or the end user, rather than at its own facility.

Trust Receipt

An instrument acknowledging that the borrower holds certain goods in trust for the lender.

General Security Agreement

A legal document that secures repayment by granting the lender a security interest in a range of the borrower's assets.