The correct answer to the question will be C. a hot air balloon moving at 30° east of north with no net force
EXPLANATION:
Before coming into any conclusion, first we have to understand an inertial frame of reference.
An inertial frame of reference is a frame of reference which is an unaccelerated frame. In this frame of reference, Newton's laws are valid.
A falling rock can not be considered as an inertial frame as it is accelerating. When a body falls, the forces that act on the body are gravity and air resistance. The gravity acts in vertical downward direction while air resistance acts in vertical upward direction. There is a net force in the downward direction which means it is experiencing an acceleration.
The frictionless spinning merry-go-round can not be considered as an inertial frame of reference. It is so because a rotating frame can not be considered as an inertial frame. It is non inertial in nature.
A hot air balloon moving 30 degree east of north with no net force can be considered as an inertial frame as it is not accelerating.
A space shuttle whose boosters just ignited for take off can not be also inertial frame as it is an accelerated frame.