Which situation best illustrates the process of capital formation?
A. An accountant tries to avoid spending money whenever possible.
B. An engineer uses part of her salary each month to invest in
stocks.
C. A banker takes out a low-interest loan to buy a new car.
D. A farmer greatly increases his income by selling crops overseas.

The situation that best illustrates the process of capital formation is that an engineer uses part of her salary each month to invest in stocks.

What is capital formation?

Capital Formation is characterized as the portion of a country's present output and imports that is not used or transferred during the reporting period, but instead added to its stock of capital goods.

Total capital formation can be divided into several categories. In the formation of Gross Fixed Capital, An engineer uses part of her salary each month to invest in stocks, is best describes the process of capital formation.

Therefore, option B is correct.

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