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The term indirect impacts' refers to the production and sales of goods and services <br />that result from the fact that direct impacts require inputs from other business sectors. <br />For example, in order to sell hay at the retail level (a direct impact), materials will be <br />purchased from local wholesalers and growers. This second levet of activity is the <br />source of indirect impacts. <br />Induced Imo -Ws <br />The changes in employment in those industries that experience both direct and indirect <br />impacts result in changes in income that are spent in the region to purchase consumer <br />goods and services. This income effect Is the source of induced impacts. For example, <br />if hay is produced locally, local incomes increase. Local spending of this additional <br />income is the basis of an induced impact. <br />Totpl_ Economic lm.oact <br />The total economic impact is found by adding all three levels of impact for each sector <br />of the local economy. The larger the magnitude of local purchases, the larger will be the <br />total local impact; conversely, the larger the portion of expenditures which are made <br />outside the local economy, the smaller.wili be the total local impact. The amount spent <br />outside the region does not effect the local economy, but the amount spent locally on <br />such things as food, services, and supplies is considered a local impact. Similarly, <br />purchases resulting from increased wages which stem from both direct and indirect <br />impacts are the basis for the Induced+ impact, a further round of rocal'spending. Induced <br />impacts lead to additional rounds of indirect'and induced impacts. This is referred to as <br />a Omultiplier effect.". <br />To the extent that expenditures occur outside the local economy, they are considered to <br />34 <br />