In 2012, San Diego's Mayor Jerry Sanders committed millions of dollars in city funding to help set in motion the expansion of the San Diego Convention Center along with the addition of a 500-room hotel to support the expansion. The leaders of many cities across the country have allocated public subsidies to help finance the construction of such facilities, claiming that they will promote economic development. Mayor Sanders created a task force to analyze the costs and benefits of the expansion. Using an economic multiplier analysis, the task force concluded that the required public investment is justifiable, as the expansion alone would result in the creation of nearly 7,000 permanent jobs.

• What economic assumptions has the task force made to support its conclusions? Explain.

• Identify two likely winners and two likely losers from such a project, and briefly explain. Please be as specific as possible and explain your answer.