CONSTRUCTION CONTRACTS REVIEW QUESTIONS AND ANSWERS RATED A+
List several measures that describe the size of the construction industry - (ANSWER)- Accounts for nearly
2/3 of $1 trillion in expenditures per year
- 5% of GDP
- 6% of industrial workforce
- largest single production activity in the American economy
What construction-related measures can be used to describe the strength of the U.S. economy? -
(ANSWER)- housing starts
- expenditures for new construction are highest when the economy is strong
- weak economy expenditures will be devoted to renovation and remodeling
Under what conditions might the funding of public construction projects be particularly high? -
(ANSWER)In periods of recession, the government is trying to stimulate the economy
Why is the construction industry referred to as an easy entry and easy exit industry? - (ANSWER)- high
growth rate
- low capital requirements
- little absolute cost or profit advantage for established firms
- most states have no rigid licensing requirements or fees
- a company company can be formed just to construct a single project
- firms are seldom sold as a unit
What are the ramifications of the cyclic tendencies experienced in the construction industry? -
(ANSWER)- limited employment opportunities during certain time periods
- unemployment rates are frequently double the rates of other industrial workers
Contrast the financing of public versus private construction projects. - (ANSWER)Private
- expenditure of existing capital
- direct loans from outside creditors
- sale of fixed assets
, CONSTRUCTION CONTRACTS REVIEW QUESTIONS AND ANSWERS RATED A+
- issuance of additional shares of stock
- issuance of corporate bonds
- endowments
Public
- appropriations from annual operating budgets
- special taxation assessments for specific purposes
- bond issues for specific purposes
- endowments
Give examples of publicly financed building construction projects. - (ANSWER)- schools, hospitals, fire
stations, courthouses
Give examples of publicly financed non-building construction projects. - (ANSWER)roadways, damns,
airports, canals
Contrast typical construction projects with the production of manufactured goods. -
(ANSWER)construction industry is characterized by custom-built projects, whereas standardized
methods are common in manufacturing. Control of quality is more easily assured in manufacturing
construction projects are relatively complex and generally completed through the combined efforts of
different crafts
What would be some key indicators in the construction industry that conditions are improving during an
economic slump? - (ANSWER)- housing starts
- more privately funded projects and less public
Prior to an economic recessions, the timing of the visible changes is different for the different
construction sectors (residential, commercial, industrial, etc.). The same is true when economic
conditions improve significantly. Explain why the different sectors respond differently in terms of timing.
- (ANSWER)- projects that are characterized by long lead times or that require a long construction
duration are affected less by short-term swings in the economy
List several measures that describe the size of the construction industry - (ANSWER)- Accounts for nearly
2/3 of $1 trillion in expenditures per year
- 5% of GDP
- 6% of industrial workforce
- largest single production activity in the American economy
What construction-related measures can be used to describe the strength of the U.S. economy? -
(ANSWER)- housing starts
- expenditures for new construction are highest when the economy is strong
- weak economy expenditures will be devoted to renovation and remodeling
Under what conditions might the funding of public construction projects be particularly high? -
(ANSWER)In periods of recession, the government is trying to stimulate the economy
Why is the construction industry referred to as an easy entry and easy exit industry? - (ANSWER)- high
growth rate
- low capital requirements
- little absolute cost or profit advantage for established firms
- most states have no rigid licensing requirements or fees
- a company company can be formed just to construct a single project
- firms are seldom sold as a unit
What are the ramifications of the cyclic tendencies experienced in the construction industry? -
(ANSWER)- limited employment opportunities during certain time periods
- unemployment rates are frequently double the rates of other industrial workers
Contrast the financing of public versus private construction projects. - (ANSWER)Private
- expenditure of existing capital
- direct loans from outside creditors
- sale of fixed assets
, CONSTRUCTION CONTRACTS REVIEW QUESTIONS AND ANSWERS RATED A+
- issuance of additional shares of stock
- issuance of corporate bonds
- endowments
Public
- appropriations from annual operating budgets
- special taxation assessments for specific purposes
- bond issues for specific purposes
- endowments
Give examples of publicly financed building construction projects. - (ANSWER)- schools, hospitals, fire
stations, courthouses
Give examples of publicly financed non-building construction projects. - (ANSWER)roadways, damns,
airports, canals
Contrast typical construction projects with the production of manufactured goods. -
(ANSWER)construction industry is characterized by custom-built projects, whereas standardized
methods are common in manufacturing. Control of quality is more easily assured in manufacturing
construction projects are relatively complex and generally completed through the combined efforts of
different crafts
What would be some key indicators in the construction industry that conditions are improving during an
economic slump? - (ANSWER)- housing starts
- more privately funded projects and less public
Prior to an economic recessions, the timing of the visible changes is different for the different
construction sectors (residential, commercial, industrial, etc.). The same is true when economic
conditions improve significantly. Explain why the different sectors respond differently in terms of timing.
- (ANSWER)- projects that are characterized by long lead times or that require a long construction
duration are affected less by short-term swings in the economy
