How do you achieve effective communication?

third person

explanation:

note the usage of names and pronouns, "james" & "the old man". this alone can confirm it as third person, as first person uses "i" and the like, while second person uses "you" and the like.

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it is the background information on the characters and setting explained at the beginning of the story. the exposition will often have information about events that happened before the story began. the exposition is often the very first part of the plot.