Which category captures the ripple effects from suppliers and vendors responding to initial spending by the airport community?

• A. Direct
• B. Indirect
• C. Induced
• D. Multiplier

Answer: (B)

Ripple effects through the supply chain as suppliers respond to initial airport spending are called indirect effects. When the airport community spends, the first round of activity goes to the airport’s immediate suppliers. Those suppliers, in turn, increase their own orders, hire more workers, and buy more inputs from other firms, spreading the impact further down the supply chain. That chain reaction beyond the initial spending is what indirect effects capture. Induced effects would involve increased spending by workers paid by those firms, not the ripple through the suppliers themselves. The multiplier term would sum all direct, indirect, and induced effects, but the specific category describing the ripple through suppliers is indirect.