Macroeconomic decisions affect the entire economy

Steps:

• Define macroeconomics as decisions impacting national output, employment, and inflation.
• Identify key macro tools: monetary policy (central banks) and fiscal policy (government spending/taxes).
• Evaluate options for both actions being aggregate-level policies.
• Select option where both fit macro criteria.

Why B is correct:

• Central bank reducing money supply is monetary policy to control inflation; government increasing defense spending is fiscal policy to boost aggregate demand—both defined as macroeconomic interventions.

Why the others are wrong:

• A: School hiring and firm pricing are microeconomic (individual entity decisions).
• C: Government tax increase is macro, but farmer's crop choice is microeconomic (personal production).
• D: Household energy cuts and worker overtime are microeconomic (individual consumption/labor choices).

Final answer: B