What does a local module source path indicate?

• A. Remote module path in VCS
• B. A Local module path on the filesystem
• C. A Private module registry
• D. An inline module within configuration

Answer: (B)

When Terraform sees a module source path that points to a local filesystem location, it means the module’s code lives in a directory on the machine running Terraform. Terraform will load that module directly from that directory, using it as a local module. You can use a relative path like ../modules/network or an absolute path like /home/you/terraform/modules/network. This is different from pulling a module from a remote source or registry, or trying to define a module inline within the configuration.

So the local module path on the filesystem is the correct interpretation because it explicitly indicates a directory on your own machine that contains the module code to be reused.