Answered

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Which situation best illustrates the process of capital formation?

A. An engineer tries to limit her spending during the week.
B. A farmer increases his profits by growing a variety of new crops.
C. A factory worker takes out a high-interest loan to buy a new home.
D. An artist buys bonds that will increase in value over time.

Sagot :

GinnyAnswer

Final answer:

In a business context, a farmer enhancing profits by diversifying crop production represents the process of capital formation.


Explanation:

The best situation illustrating the process of capital formation among the options provided is:

  • B. A farmer increases his profits by growing a variety of new crop

This scenario shows how a farmer is reinvesting profits to expand and enhance productivity, which is a key aspect of capital formation in a business context. By utilizing the earned profits to improve and diversify crop production, the farmer is contributing to the accumulation of capital for future growth.


Learn more about Capital Formation here:

https://brainly.com/question/43980584


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