Capital as physical assets in production

Steps:

• Recall factors of production: land, labor, capital (tools/buildings for production), entrepreneurship.
• Identify capital: durable goods like machinery or factories that aid production, not money or services.
• Evaluate choices: seek direct creation/use of physical production assets.
• Select option matching capital investment in tangible infrastructure.

Why C is correct:

• Capital is defined as producer goods like factories; building one directly adds to physical capital stock for future production (per economic classification of factors).

Why the others are wrong:

• A: Stock purchases are financial investments, not physical capital.
• B: Borrowing for electricity finances a variable cost (utility), not capital formation.
• D: Savings represent financial resources, not the physical capital assets themselves.

Final answer: C