This introductory text offers an alternative to the encyclopedic, technically oriented approach taken by traditional textbooks on macroeconomic principles. Concise and non-technical but at the same time rigorous, its goal is not to teach students to shift curves on diagrams but to help them understand fundamental macroeconomic concepts and their real-world applications. This is accomplished by the clear exposition of introductory macroeconomic theory provided in the book along with more than 700 two/three sentence “news clips” of economics media coverage that serve as illustrations/exercises of the concepts discussed.

This updated edition includes subprime mortgage crisis and other subjects; new “curiosities” (boxed expositions of important topics) have been added, as have “news clips” about recent events; and the most challenging end-of-chapter questions are now separated from the less challenging. Many chapters include a set of numerical exercises (quite different from those found in traditional texts); a sample exam question appears at the end of each section within a chapter; and a test bank of multiple-choice questions (with answers) is available online. Technical material appears in appendices following each chapter. Other appendices offer answers to the sample exam questions and the even-numbered end-of-chapter exercises.

Introduction. The Basics of Supply and Demand, and a Big Picture. Measuring GDP and Inflation. Unemployment. The Role of Aggregate Demand. The Supply Side. Growth and Productivity. The Money Supply. The Monetarist Rule. Monetary Policy and Interest Rates. Real versus-Nominal Interest Rates. Stagflation. The Balance of Payments. Policy in an Open Economy. Purchasing Power Parity. Interest-Rate Parity.