Economics • Economic BasicsHard
What is the primary implication of a high concentration of mineral and forest-based industries in the industrial belt of Korba and Raigarh districts on Chhattisgarh's cyclical macroeconomic fluctuations?
A. The state economy remains highly sensitive to global commodity price cycles and domestic core sector demand✓ Correct Answer
B. Local employment levels are completely insulated from international trade shocks and recessionary trends
C. Consumer price inflation in the state moves inversely with international crude oil prices
D. The tertiary sector completely dominates local revenue generation, reducing industrial vulnerability
💡 Solution & Explanation
Regions heavily reliant on heavy industries, coal mining, power generation, and primary metal production exhibit high vulnerability to fluctuations in national and international demand for industrial inputs. When commodity prices drop globally or domestically, state revenues and industrial output experience immediate downturns. Conversely, industrial booms generate substantial fiscal surpluses for the state treasury.
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