Which of the following issues is most closely related to microeconomics?

• A. The measurement of a country's gross domestic product (GDP)
• B. The causes of inflation in the entire economy
• C. The pricing strategy of a local coffee shop
• D. The impact of monetary policy on national unemployment

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the scope of microeconomics versus macroeconomics. Microeconomics focuses on individual agents such as consumers, firms, and markets, while macroeconomics deals with the economy as a whole, including aggregate measures like GDP, inflation, and unemployment.
2. Step 2: Analyze each option to determine whether it deals with individual economic units or the entire economy. For example, GDP measurement and inflation causes are aggregate economic issues, which fall under macroeconomics.
3. Step 3: Recognize that the pricing strategy of a local coffee shop involves decisions made by a single firm in a specific market, which is a classic microeconomic topic.
4. Step 4: Confirm that the impact of monetary policy on national unemployment is a macroeconomic issue because it concerns overall economic performance and policy effects on the entire labor market.
5. Step 5: Conclude that the issue most closely related to microeconomics is the pricing strategy of a local coffee shop, as it involves individual firm behavior and market interactions.