Question

Households play a role in physical capital accumulation because​ ____________. A. the population growth rate determines the number of efficiency units of labor and therefore output. B. it is households that determine their level of consumption and therefore the rate of saving. C. the interest rate on investment is determined by households. D. households provide the human capital that produces the physical capital

Answer 1

The correct answer is option B.

Step-by-step explanation:

Physical capital accumulation depends upon the level of investment and investment comes from saving. It is the households that decide what portion of income they will consume and what portion to save.

So in a way households determine the rate of saving. Thus we can say that households play an important role in the physical capital accumulation.