Input-Output Analysis This chapter, drawn from Chapter 6 of the Fifth Edition of Urban Economics (McGraw-Hill/Irwin, 2003) explains the fundamentals…




14. Suppose that wire production in the city with the input coefficients shown in Table 6-3 increases by $100.

a. Compute the first, second, and third rounds of spending resulting from the increase in wire sales, using the format of Figure 6-6 to report your results.

b. By how much does spending on wire, computers, and local goods eventually increase?

c. What is the ultimate increase in total sales?

15. Consider a city that estimates its export multipliers from the input coefficients from a 1965 input-output study.

a. Will the city overestimate or underestimate the stimulative effects of exports?

b. If your answer to (a) is “It depends on . . . ,” make a list of questions that you would ask Ms. Information, the most knowledgeable person in the city. Note: She does not know the current input coefficients.

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