What is likely to happen when a major business closes or moves out of an area?

a: more money is available to provide city services.
b: people will move into the area.
c: population decreases.
d: service industries shut down.
e: unemployment increases.

The correct answer is E. When a major business closes or moves out of an area, unemployment increases.

Explanation:

Large businesses are usually the main employment givers in the areas where they are established. Therefore, they are fundamental pillars of their communities, mostly if these are inner cities or small towns, where the existence of these large businesses constitutes a broad spectrum of economic activity in the area.

Therefore, in case of closing or moving of these businesses, the level of unemployment in the area will tend to rise, since a large part of the population is generally employed directly or indirectly by it.

For example, Cargill is a large grain export business located in Minnetonka, Minnesota. This town has a population of 54,000 people, of which about 4,000 work directly in Cargill, while another 8,000 do so indirectly, through services related to the company's existence in the city. Therefore, if Cargill moved out of town, some 12,000 people could lose their jobs.

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