The indirect economic impact of a tourist event or attraction on the local economy is determined by which concept?

• A. The total of new spending that is a direct result
• B. The cost of operating the event or attraction
• C. The multiplier effect
• D. All of the above

Answer: (C)

Think about how money spent by visitors doesn’t stop after a single transaction. The multiplier effect captures how that initial spending flows through the local economy, creating more income and more spending in subsequent rounds. When a tourist pays for meals, accommodation, or tickets, that money becomes income for local workers and suppliers. They in turn spend part of what they earn, supporting additional businesses and workers, and the cycle continues. This ripple of spending builds a total impact that is larger than the initial direct spending alone. The other options describe parts of the picture or costs but don’t describe the mechanism that drives the indirect impact. So the mechanism that determines the indirect economic impact is the multiplier effect.