Question

Question 10 of 10

Which situation best illustrates the process of capital formation?
A. An engineer tries to limit her spending during the week.
OB. An artist buys bonds that will increase in value over time
OC. Afactory worker takes out a high-interest loan to buy a new home.
D. A farmer increases his profits by growing a variety of new crops.

Answer 1

Answer: an artist buys bonds that increase value over time

Step-by-step explanation:

Answer 2

Answer: OC. A factory worker takes out a high-interest loan to buy a new home.

Step-by-step explanation:

This situation is most suitable for the employer but also the banking sector. If a worker takes such a loan, he will be forced to continue working to repay that loan. The bank will profit primarily because of the interest it has taken. It will also benefit the employer for several years to have workers who will nonetheless be loyal to the company, given that legal sanctions for non-refund of interest follow.