DECA Sports and Entertainment Marketing Practice Exam

What is meant by indirect economic impact?

1. Economic changes resulting from direct spending

2. Effects on the economy that are less visible and harder to measure

3. Tax revenues generated from sports events

4. Investment returns from sports marketing

The correct answer is: Effects on the economy that are less visible and harder to measure

Indirect economic impact refers to the effects on the economy that are less visible and harder to measure than direct economic changes. This type of impact typically encompasses the ripple effects that occur in the broader economy as a result of an initial spending event. For example, when a sports event draws visitors who spend money on tickets, merchandise, and food, these expenditures create income for local businesses. This money then circulates and generates further economic activity as businesses hire employees, who in turn spend their earnings in the community. Measuring indirect economic impacts is often challenging because they can manifest in various ways over time. For instance, the benefits might include increased tourism or an uptick in local businesses that may not be immediately quantifiable. Thus, while direct spending is relatively straightforward to track, the subsequent economic changes that stem from that spending are more elusive and require more nuanced analysis to evaluate their true value to the economy.