Question

In supporting their local economic base, cities may at times incur expenses from doing business with entities located outside of their local community (e.g., in cities with high tourist activity, souvenirs are likely to come from low-wage countries). These expenses are an example of ______ from the local economy.

Answer 1

When cities incur expenses by doing business with entities outside of their economic base, these are called Leakages.

What are leakages?

These refer to the flow of cash and resources out of a local economy to other economies.

When cities engage in business with entities from outside their economy, they would be passing on cash to those entities. This cash would therefore leave the local economy which makes it a leakage.

Find out more on leakages at brainly.com/question/10344288.