Definition: Households are individuals or groups of people living together who make economic decisions.

Roles of Households in the Economy:

1. Consumers:

   • Buy goods and services to satisfy needs and wants.

2. Providers of Factors of Production:

   • Labour – they work and provide manpower.

   • Land – they own land and rent it out.

   • Capital – they invest money in businesses.

   • Enterprise – sometimes run their own businesses.

3. Income Earners:

   • Receive income in the form of:

     • Wages (for labour)

     • Rent (for land)

     • Interest (for capital)

     • Profit (for enterprise)

4. Decision Makers:

   • Decide how much to spend, save, and work.

Importance:

Households are a key part of the economy – they influence demand, supply of resources, and overall economic activity.