DECA Sports and Entertainment Marketing Practice Exam

What is meant by direct economic impact?

1. Profit margins from product sales

2. The total new spending resulting from an event

3. Operational costs of a business

4. The estimated revenue of an organization

The correct answer is: The total new spending resulting from an event

Direct economic impact refers to the immediate and measurable effects of an event or activity on the economy, particularly through new spending that it generates. When an event occurs, such as a sports competition or concert, it brings in attendees who spend money on various services and goods, including tickets, food, lodging, and local transportation. This new spending is what constitutes the direct economic impact and is considered a vital measure of an event's financial significance to the local or regional economy. The total new spending resulting from an event can be quantified and helps stakeholders, including policymakers and businesses, understand how much economic activity is generated by an event. This figure is crucial for assessing the value of hosting the event and for making decisions about future investments in similar activities. While profit margins, operational costs, and estimated revenue are important business metrics, they do not specifically capture the concept of direct economic impact, which focuses solely on the fresh influx of spending tied to an event.