IGCSE Travel and Tourism Practice Exam

What term describes the economic effects that can arise from tourism?

1. Export leakage

2. Economic impacts

3. Cultural exchange

4. Infrastructure development

The correct answer is: Economic impacts

The term that describes the economic effects that can arise from tourism is "economic impacts." This encompasses a wide range of financial consequences associated with tourism activities, such as growth in local employment, increased business revenues, and significant contributions to a region's GDP. Economic impacts can be both positive and negative. Positive impacts may include job creation in various sectors, development of local businesses that cater to tourists, and increased tax revenues that can be reinvested in the community. Conversely, negative impacts might involve issues like inflation or the reliance on seasonal work, which can lead to economic instability during off-peak periods. In contrast, export leakage refers specifically to the money that leaves the local economy, cultural exchange focuses on the interactions between tourists and local culture, and infrastructure development pertains to the physical improvements made to support tourism but does not solely capture the overall economic effects of tourism. Thus, "economic impacts" is the most encompassing term regarding the various economic effects resulting from tourism.