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This invaluable book is an introduction to macroeconomic theory and policy. It provides the background of numerous issues that are of current importance. Although its primary purpose is to serve as a resource for undergraduates, it will also be useful to other readers. Despite being an introduction to the subject, its approach is not superficial, and complex issues are not ignored. Theory is related to practical issues. Particular attention is devoted to open-economy theory and the international constraints on the domestic economy. As is usual in economic matters, the conclusions are frequently tentative. Economic theory does not always provide answers. It does,however, encourage people to ask useful questions. And that is one of the aims of this book.An accompanying Instructors' Guide to Output and the Role of Money is available free to instructors who adopt Output and the Role of Money as a course book. The guide, Macroeconomic Thinking, is designed by the author to ensure that instructors' students derive maximum value from the book. The author has found that students enjoy the style of teaching presented and that it produces graduates who are knowledgeable and enthusiastic about economic theory and its applications.