explain with the aid of a diagram the income and
substitution effects and use the concepts to describe what happens
when the price of a products decreases.
3.1 With aid of the circular flow of income and spending in the
economy diagram,
describe how various participants in the economy and the government
interact with
each other. Describe how this ensures the effective and efficient
operating of the
country.
3.2 Government participation in the economy is essential to improve
the standard of
living of the people. Critically provide a detailed analysis of the
policies that the
government could use to increase the living standards of the
people.