1) We discussed the principal that "Cities are value propositions, not cost

propositions." Which of the sentences below do NOT follow from this:

a) Public officials need to account for increased agglomeration, and pay attention to

the demands on public transportation.

b) Investments in infrastructure reduce capital available for long-term planning.

c) Though location rents are higher in cities, higher rents are possible because of

the great value proposition cities offer.

2) We want to compare the overall multiplier of two neighboring cities:

-- "Fredsville", a highly industrialized & financial economy, and

-- "Luis-Berg", an economy that has experienced recent contraction,

whose tax base is increasing to make up for the city's budget shortfalls.

Calculate the multiplier for each city's economy, then select the statement below

the chart that is most true.

Fredsville LuisBerg Propensity to Save: 5% 8% Propensity to Tax: 5% 7% Balance of Imports over Exports: 5% 4%