Which term describes businesses that draw purchasing power into the area from outside the community, such as exporting goods?

Study for the Florida Mutual Recognition Test. Use flashcards and multiple choice questions, each with hints and explanations. Prepare thoroughly for your exam!

Multiple Choice

Which term describes businesses that draw purchasing power into the area from outside the community, such as exporting goods?

Firms are categorized as basic (export) versus nonbasic (local-serving). The idea here is to identify which type brings new money into the community from outside. Basic or export-oriented businesses sell goods or services to customers outside the area, so the money they earn flows into the local economy—wages, profits, and purchases made with those dollars—creating a local multiplier effect. Nonbasic and local-service establishments serve local residents and recycle existing purchasing power within the community rather than drawing in new money. So the term that best fits the description of drawing purchasing power from outside is basic businesses (export). Export-oriented is related, but the standard label used in this context is basic (export).

Which term describes businesses that draw purchasing power into the area from outside the community, such as exporting goods?

Study for the Florida Mutual Recognition Test. Use flashcards and multiple choice questions, each with hints and explanations. Prepare thoroughly for your exam!

Which term describes businesses that draw purchasing power into the area from outside the community, such as exporting goods?

Get the latest from Passetra