The question specifically states "how". The provider is the only component of Terraform that know HOW to create, update, delete a resource, as it knows all the specifics.

"What" = config "How" = provider

B. Terraform core Terraform core is responsible for reading the configuration, generating the execution plan, and applying the changes by interacting with the providers.

The Terraform provider determines how Terraform creates, updates, or deletes resources. Providers are responsible for translating Terraform configurations into API requests that manipulate resources in the target environment. Each provider implements the necessary operations for a specific type of infrastructure, such as AWS, Azure, or Google Cloud Platform. When Terraform applies a configuration, it reads the provider information from the configuration and uses it to interact with the target environment. The provider then manages the lifecycle of the resources by creating, updating, or deleting them as needed. Note that while the Terraform configuration defines the desired state of the resources, and the Terraform core is responsible for managing the planning and execution of changes, it is ultimately the provider that determines how those changes are implemented in the target environment.

C. Terraform provider

https://developer.hashicorp.com/terraform/language/resources/behavior

as gekkehenk wrote, it's C

The Terraform provider determines how Terraform interacts with a specific API or service provider to create, update, or delete resources. The provider translates Terraform configuration files into API requests, and then interacts with the API to manage resources on the service provider.

C. Terraform provider determines how Terraform creates, updates, or deletes resources. A provider is responsible for understanding API interactions and exposing resources. Providers can represent physical resources like compute instances, or abstract resources like DNS records. A provider is responsible for translating the Terraform configuration into API calls to the underlying service, and for handling the response from the service. The Terraform configuration specifies which provider to use for each resource block. The provider block itself specifies the configuration necessary to connect to the API of a particular service, such as credentials or endpoint information.

C, provider = how, .tf = what

The Terraform configuration is the main input for Terraform, defining the desired state of the resources in the infrastructure. It is the definition of how Terraform should create, update, or delete resources in order to reach the desired state.

Terraform config determines what , Provider determines how. Answer should be provider.

correct is A

State file should be included; because The State File determines how Terraform creates, updates, or deletes resources. The state file is a JSON file that is used to persistently store all the resources created by Terraform. It stores the state of the resources, as well as their properties, so that Terraform knows what actions to take on the next run.

Applying a Terraform configuration is the process of creating, updating, and destroying real infrastructure objects in order to make their settings match the configuration. https://developer.hashicorp.com/terraform/language/resources/behavior

correct is A

A. Terraform configuration The Terraform configuration determines how Terraform creates, updates, or deletes resources. It is written in HashiCorp Configuration Language (HCL) and it includes the resources that will be managed by Terraform, their properties, and the dependencies between them. The configuration is read by the Terraform core and used to generate an execution plan that is then passed to the Terraform provider to make the necessary changes to the infrastructure.