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Correct answer: C. Neither label describes a kind of program: the same server can execute locally or remotely, and the transport is what changes.
Explanation
The principle — Where a server runs and how it is reached are deployment facts, and MCP keeps them out of the definition of what a server is.
Why the key is correct — MCP servers can execute locally or remotely. What follows the choice is a difference in typical shape rather than in kind: local MCP servers that use the STDIO transport typically serve a single MCP client, whereas remote MCP servers that use the Streamable HTTP transport will typically serve many MCP clients. The work of the move is real — concurrency, authentication, hosting — but it is not a rewrite of the server's purpose or of the messages it exchanges.
Why the others are wrong — There is no separate species of remote server. The messages do not change with the transport. And single-client behaviour comes from the transport, not from the code.
Remember this — Local and remote name the transport, not the program.
Sources — MCP first-party documentation.
Sources
“MCP servers can execute locally or remotely.”
“Local MCP servers that use the STDIO transport typically serve a single MCP client, whereas remote MCP servers that use the Streamable HTTP transport will typically serve many MCP clients.”
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