American Institute of Certified Planners (AICP) Practice Exam

What does input-output analysis help determine?

1. Current population statistics

2. Economic output of a region

3. Net migration statistics

4. Household income levels

The correct answer is: Economic output of a region

Input-output analysis is a quantitative economic technique that helps to understand the interdependencies between different sectors of an economy. It captures the flow of goods and services among industries and is useful for determining how changes in one industry can influence others, as well as the overall economic activity in a region. This methodology provides a detailed picture of how output from one sector serves as inputs to another, allowing analysts to assess the total economic output resulting from various levels of activity. By focusing on the relationships between industries, input-output analysis provides insights into the economic contributions of various sectors, identifies key drivers of economic performance, and aids in predicting how shifts in production can affect overall economic output. This makes it an essential tool for economic development planning and evaluating regional economic conditions. Other options do not align with the primary purpose of input-output analysis. For instance, current population statistics pertain more to demographic studies rather than economic relationships. Similarly, net migration statistics focus on population movement, which is distinct from how industries interact economically. Household income levels are generally derived from income distribution studies and do not specifically illustrate the flow of goods and services between sectors. Therefore, B is the appropriate choice, as it directly relates to the economic output of a region, which is the core of input-output