It makes a dramatic setting for action (7)
I believe the answer is:
scenery
'it makes a dramatic' is the definition.
The definition suggests a singular noun which matches the answer.
'setting for action' is the wordplay.
'setting' becomes 'scene' (I've seen this in another clue).
'for action' becomes 'ry' (I am not sure about this - if you are sure you should give a lot more credence to this answer).
'scene'+'ry'='SCENERY'
Can you help me to learn more?
(Other definitions for scenery that I've seen before include "Landscape, view" , "Stage backdrop, perhaps" , "Stage sets" , "Attractive landscape" , "Landscape features" .)