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This economics course textbook is a self-contained text. Its emphasis on Europe sets it apart - accounts of open economies, exchange rates, capital movements and government intervention are central, with considerable explanation of labour market institutions. Students' interest is stimulated by consideration of current policy debates, with one chapter devoted to the monetary union debate and the epilogue considering the situation of Eastern Europe. The text is structured by modern microeconomic foundations for economic theory (Ricardian equivalence, trade union theory and endogenous growth), with rational expectations and intertemporal considerations fully incorporated. At the same time, neoclassical long-run explanations (IS-LM, aggragate demand and supply, and Solowian growth) are presented in detail. The authors have managed to present to the reader in an accessible fashion the current theoretical and empirical research in economics. This book can be used for undergraduates in economics as the main textbook for macroeconomics, and for MBA students or undergraduates of business studies as a textbook for a first-time course in economics. There is an accompanying teacher's manual which gives guidance on using selected chapters of the book on shorter courses, for example, an aggregate demand/business cycle track which avoids detailed microfoundations but emphasizes the role of sticky prices in generating cyclical fluctuations, or a neoclassical/microfoundations track for instructors who prefer to stress first principles. The theoretical and applied exercises at the end of each chapter are designed to serve as self-tests for the student to continuously check their understanding. Visual aids present students with live policy issues, and display the usefulness of each concept or result. Again, the European focus comes into play with results drawn from comparisons between European countries rather than being US-biased. The text does not depend on algebraic exposition, since the results are established with geometrical aids, aiming to encourage logic and intuitive thought in the readers. Each chapter includes a summary of key ideas, a list of important concepts and a set of applied and theoretical exercises.