Physical capital is a factor of production, which is a perceptible, touchable human-made good that help the course of creating a good or service. Some examples can be the machinery, buildings, office, vehicles, computers, that a company has to make their products. This can be reusable as well meaning that you can use them more than once in your process.
The chosen option qualifies for the description explained, extra space is tangible and reusable too.
When you say physical capital, it refers to the additional machinery, building, space etc. Therefore an example of changing physical capital is B. Building extra space in the factory. By doing this, you are adding additional physical location in where your employee or worker can work.
Answer: the government would no longer be able to finance deficits by printing money, and inflation would be under control.
El Salvador adopted the dollar because it's revenue could no longer service the budget. The adoption of the dollar will put a control to inflation since the dollar is the currency it uses to trade in the foreign market.
