Question

Look at the circular flow diagram. Choose and define an environmental issue. Using the diagram as a guide, explain how the environmental issue you chose affects the relationship between household and government.

Answer 1

Answer:

Household and government are related to each other in terms of economic unit. Household pay taxes to government and then government use that money for the people. Household earn the money by working in firms or by running their own business.

Environmental issues such as air pollution can affect the relationship between household and government. Popleuses their own transport to go to firms and the number of vehicles are increasing day by day which causes air pollution.

The government can form policies against personal transport and convince people to use public transport which will be beneficial for government as government will directly get money from household.