For Each of the Following Events, Ceteris Paribus, State the Effect

question 20

Essay

For each of the following events, ceteris paribus, state the effect on GDP (does it increase/decrease/remain unchanged?) and why.
A.A few small boat builders decide to move from the production of simple boats for leisure use to the production of yachts for the America's Cup.
B.You are short of cash and you need more exercise so you sell your car for $1000.
C.The Australian Tax Office gets tough on illegal unrecorded activity (the underground economy )
D.A major oil spill occurs off the coastline of an area with high unemployment levels.Many of the local unemployed are employed to help with the clean-up.

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Definitions:

Straddle Position

An investment strategy involving the purchase or sale of both a call option and a put option on the same asset, with identical strike prices and expiration dates, used to bet on volatility.

Delta-hedging

A strategy used in options trading to reduce the risk of price movements of the underlying asset by offsetting positions.

Options Sellers

Parties in an options contract who take on the obligation to buy or sell the underlying asset if the options buyer exercises their right.

Markets

Platforms or systems where buyers and sellers interact to trade goods, services, securities, or other assets.