"Often, the purpose of these stories is to teach a lesson or to describe characteristics of one's culture." Folktales are used to entertain will teach a lesson using fictitious tales.
It is typically performed in a particular place, at a particular time, and uses a special language. Despite those rules, it employs flexible patterns and structures that aid composition, memory, and re-performance. The audience often participates in the performance as well.
The correct answer is C, because it has a correct infinitive 'to act' and a gerund 'dreaming'. A and B don't have them, and in D, 'saving' is a participle, not a gerund.