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This chapter is excerpted from 'Macroeconomics, Second Edition, Volume I'. Macroeconomics is the study of the economy as a whole and of the work and saving choices of individual economic agents from which macroeconomic activity emerges. This book, produced in two volumes, takes an integrative approach to that topic. It introduces macroeconomics as a study of (1) the long-run, 'micro' foundations of macroeconomic analysis and (2) the short-run deviations from long-run equilibrium that are brought about by disparities between aggregate supply and aggregate demand. The first of these is the subject of Volume I, the second, the subject of Volume II. The first chapter of Volume I focuses on the importance of a clear understanding of the difference between long-run and short-run analyses of macroeconomic activity, showing, in particular, how confusion over the effects of government deficits on the economy can arise from failing to distinguish between their short-run and long-run effects. Chapter 2 explains the distinction between nominal and real gross domestic product and works through the fundamentals of the National Income and Product Accounts. Chapter 3 lays out a simple model of the work and saving choices of individual economic agents, and Chapter 4 generalizes the analysis to a more sophisticated analysis of the consumption/saving calculus. Chapter 5 derives the supply and demand for labor and for capital, which represent the principal inputs to aggregate production. Chapter 6 takes up the issue of economic growth and reviews some of the current pessimism relating to US economic growth. Finally, Chapters 7 and 8 examine the micro effects on aggregate economic activity of changes in government tax and spending policy. Volume II begins with a review of monetary policy (Chapter 1) and fiscal policy (Chapter 2) for their impacts on the aggregate economy. Chapter 3 considers at length the distinction between self-correcting and non-self-correcting distortions between aggregate supply and demand. There we review the focus of the Keynesian model on economic downturns brought about by long-lasting excess supply and the focus of the 'suppressed inflation model' on long-lasting excess demand. Chapter 4 considers the complexities that arise in diagnosing a decrease in the rate of economic growth that might result from a temporary change in the demand for money or that might be a sign of a more long-lasting secular stagnation. The government's interpretation of this problem will determine whether the growth rate simply adjusts to a new normal or the economy sinks into a protracted downturn. Chapters 5 and 6 examine the Great Contraction of 2007 to 2009 for the lessons that can be learned from it and from recent macroeconomic policy changes.