If China Decides to Enact Laws to Clean Up the Environment

Multiple Choice

If China decides to enact laws to clean up the environment, what would be the effect on its GDP?

A) GDP would increase, reflecting the fact that the environment would be cleaner.
B) GDP would decrease if the pollution controls reduce productivity by more than the cost of the controls.
C) GDP would increase as the citizens of China become happier as the environment is cleaned up.
D) GDP would increase since the environmental costs of pollution were not included in the calculation of GDP.
E) GDP would decrease as Chinese people took more leisure time.