Case: It has been reported that there has been a significant increase in haze and dust storms in the major cities of Taiwan. The haze and dust storms were originally caused by air pollution in a cross-strait neighbouring country of Taiwan and then blown into Taiwan by prevailing winds. According to the Environmental Protection Agency (EPA) of Taiwan, this cross-strait air pollution generally deteriorates the air quality in Taiwan significantly, especially during winter, which causes increasing numbers of respiratory illness, heart attacks and lung cancer. Suppose in the next two years the production and demand of high-tech air purifiers and anti-pollution masks increase constantly in Taiwan. Further, suppose that the number of visits to the doctors by Taiwanese people will increase significantly in the next two years due to chest infections and other respiratory illness.

Question

Is there likely to be an increase or decrease in measured GDP in Taiwan in the next two years, while assuming most other economic factors, such as labour participation rate, government spending and inflation rate, remain constant?You must explain specifically why the measured GDP is likely to increase or decrease or remain the same.