Question on: JAMB Economics - 2014
A major disadvantage of localization of industry is
A
the risk of structural unemployment
B
over-utilization of installed industrial capacity
C
the risk of seasonal unemployment
D
under-utilization of installed industrial capacity
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Correct Option: D
The major disadvantage of the localization of industry is the risk of structural unemployment. Here's why:
- Localization of industry means industries concentrate in specific geographic areas.
- Structural unemployment arises when there is a mismatch between the skills of the workforce and the jobs available. If an industry declines in a localized area, many workers with specialized skills for that industry may become unemployed, and it may be difficult for them to find new jobs in other industries within the same area or require them to relocate.
The other options are less directly related to the disadvantages of industrial localization:
- B. over-utilization of installed industrial capacity: This isn't generally a direct disadvantage of localization. It might be a result of high demand in a localized area, but it's not a primary negative.
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