A Terraform local value can reference other Terraform local values.

Rationale for Correct Answer: Locals are evaluated as expressions, and one local can reference another using local.. This supports building up derived values cleanly:

locals {

env = "prod"

app_name = "api-${local.env}"

}

Analysis of Incorrect Options (Distractors):

B (False): Incorrect—Terraform explicitly supports local-to-local references.

Key Concept: Local values (locals) and expression references.