Eddy currents do not cause
(A) sparking
(B) heating
(C) damping
(D) loss of energy

Hint: To solve this question, you must look for the definition of the eddy current, what is it? how is it produced? Also consider the effects of current on conductors like heat produced. A short definition of Eddy currents is that they are the currents flowing in a loop on a conducting surface. Think of the resistance offered by the conductor, also take Lenz's Law into consideration.

Complete step by step answer:
Consider a metallic plate entering a region having a magnetic field B. On the surface of the plate, imagine a loop which is in the field. The magnetic flux through the area of the loop will change as the plate moves. According to Faraday’s Law, current will be induced in the loop. Similarly, there will be many such loops having different shapes and sizes in which current will be induced. These currents are called eddy currents.
As the current is induced, heat corresponding to the induced current is also developed. It is observed that the plate slows down as it moves through the magnetic field. Here you can see that the kinetic energy of the plate is reduced. This happens due to the heat produced, as the energy should always be conserved. This is known as electromagnetic damping, as the thermal energy is produced at the cost of kinetic energy, thus slowing down the plate. This heat gets dissipated and there is loss of energy. So, we have seen that the eddy current causes heating, damping and loss energy as well.
In eddy current, the electrons are only at the surface of the conductor and the electrons do not jump off to enter the air and heat it. Hence, there is no sparking.
Therefore, eddy currents do not cause sparking.

So, the correct answer is “Option A”.

Note:
As we are talking about induced current in a loop, we are supposed to assign the direction of the current also. According to Lenz’s Law, the current flows in a direction such that it opposes the effect of the magnetic field. If the magnetic field is increasing, it will flow in a direction that will try to reduce the magnetic field. If the magnetic field is decreasing, it will flow in a direction that will try to increase the magnetic field.