This text was shaped by its aim to turn the usual priorities in macroeconomics instruction upside down. Here, the ultimate goal is not simply to teach macroeconomic theories and concepts, with real-world applications sprinkled in for motivation and excitement; rather, students work through this book towards an understanding of the macroeconomic issues and challenges facing the world economy and individual countries. Macroeconomic concepts are taught only as they serve this end. Instead of dwelling on such topics as ‘the life-cycle versus the permanent-income explanation of consumption behaviour’, or elaborating on ‘fifty ways to motivate the aggregate supply curve’, this book devotes more space than in any other macro text to issues of political economy: why do policy makers make the choices they do and how are these affected by different institutional settings? An original item not found in other intermediate texts is the Primer in econometrics placed in an optional appendix at the end of the book. Its purpose is to underscore the point that macroeconomics is about the real world.