Macroeconomic policies target the economy as a whole

Steps:

• Define macroeconomic policy as government or central bank actions affecting aggregate variables like inflation, unemployment, and growth.
• Identify options: Scan for broad economy-wide goals versus specific sector or good interventions.
• Classify: Macro involves national stability; micro targets industries, goods, or sectors.
• Select: Choose the option aligning with national economic stability.

Why C is correct:

• Price stability is a core macroeconomic objective, defined as low and stable inflation across the entire economy, often achieved through monetary policy tools like interest rate adjustments.

Why the others are wrong:

• A: Encouraging merit goods consumption is microeconomic, focusing on specific goods like education or healthcare to correct market failures.
• B: Reducing pollution in the steel industry is microeconomic, targeting environmental regulations in one sector.
• D: Reducing unemployment in the service sector is microeconomic, addressing job issues in a particular industry.

Final answer: C