Final answer:
Type II alveolar cells produce surfactant, which reduces the surface tension of the alveoli.
Step-by-step explanation:
Type II alveolar cells produce surfactant. These cells are cuboidal epithelial cells that secrete a substance called pulmonary surfactant. Pulmonary surfactant is composed of phospholipids and proteins that reduce the surface tension of the alveoli, making it easier for the lungs to expand and preventing the alveoli from collapsing.