Future Business Leaders of America (FBLA) Agribusiness Practice Test

How does a business utilize capital?

1. To hire employees only

2. To create goods and services for sale

3. To establish brand reputation

4. To manage public relations

The correct answer is: To create goods and services for sale

A business utilizes capital as a means to fund operations, which primarily involves creating goods and services for sale. Capital refers to the financial resources or assets that a company uses to invest in its activities. By allocating capital toward production, research and development, and innovation, a business can effectively create products and services that meet market demands and drive revenue. This process often includes purchasing raw materials, investing in technology, and paying for labor associated with production, allowing the business to function and grow. In contrast, while hiring employees, establishing brand reputation, and managing public relations are essential aspects of business strategy, they revolve around how the created goods and services are marketed or operated, rather than being direct uses of capital itself in a production capacity. Therefore, the primary purpose of capital in a business context is the creation of goods and services for sale.