Please Answer True or False and Explain

question 74

Essay

Please answer true or false and explain.
(A)A new technology is discovered that results in all new cars producing 50 percent less pollution.People are better off because the air they breathe is cleaner,and hence GDP will increase to reflect the fact that people are better off.
(B)A new technology is discovered that results in all new cars producing 50 percent less pollution.As a result,there is a reduction in the number of visits people make to the doctor to complain of breathing difficulties.People are better off because they are healthier,and hence GDP will increase to reflect the fact that people are better off.
(C)A new technology is discovered that results in all new cars producing 50 percent less pollution.The federal government offers all people owning cars built before 1980 a $1,000 rebate on the purchase of a new car in an attempt to remove polluting cars from the road.One thousand people accept the offer and buy new cars worth $25 million.GDP increases by the value of the cars sold,which is $25 million,and the total amount of the government expenditure on the rebate program,which is $1 million.

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Definitions:

Net Income

The income that remains in a business after all costs and expenses have been subtracted from total revenue, indicative of the financial performance.

Cash Flow Hedge

A financial instrument intended to offset potential losses or gains that could be incurred by future cash flows, acting as a buffer against currency, interest rate, or commodity price changes.

Forward Exchange Contract

A financial derivative that locks in the exchange rate at which a currency can be bought or sold on a future date.

Fair Value Hedge

A hedge of the exposure to changes in fair value of a recognized asset or liability or an unrecognized firm commitment, or an identified portion of such an asset, liability, or firm commitment, that is attributable to a particular risk and could affect profit or loss.