O Levels Economics (2281)•2281/12/O/N/23

Explanation
Identifying Macroeconomic Policy Steps:
- Define macroeconomic policy as government actions affecting the entire economy, like inflation, growth, and employment via fiscal or monetary tools.
- Assess each option: Macro policies target aggregates, not specific sectors or goods.
- Eliminate microeconomic options that focus on individual markets or industries.
- Select the option involving broad monetary control.
Why C is correct:
- Increasing the money supply is monetary policy, a core macroeconomic tool used by central banks to influence overall inflation, interest rates, and economic activity (per quantity theory of money: MV = PQ).
Why the others are wrong:
- A: Targets only the food industry, a microeconomic intervention in a specific sector.
- B: Addresses market structure for one firm, a microeconomic antitrust measure.
- D: Applies to a single commodity (wheat), a microeconomic price control.
Final answer: C
Topic: Monetary policy
Practice more O Levels Economics (2281) questions on mMCQ.me