Question

A total of 200,000 fans spent their money at the NASCAR racing series at Phoenix International Raceway in November 2006.

• Purchases made by out-of-state visitors during their stay generated $160 million in demand for goods and services.

• One study showed PIR's economic impact in Arizona at nearly a half-billion dollars in 2006.

1.) Using the reported $160 million in purchases made by out-of-state visitors, suppose that 40% of the money is re-spent, then 40% of that amount is re-spent, etc. This pattern continues indefinitely. What was the total impact, in dollars, on the local Arizona economy considering how the money was re-spent locally?

2.) The newspaper article reported that the total economic impact locally from the NASCAR event at PIR in November 2006 was nearly $500 million. What percentage of the money spent at this NASCAR event was re-spent (and then re-spent again, etc.) to product a total economic impact of $500 million? What if the total economic impact was $750 million?

Answer 1