In order to continually improve and develop the book’s explanations of economics and to reflect new economic developments the new edition features:

Fully revised coverage of competition policy in Chapter 17, including revisions of industry policy and competition policy sections. Also new to this chapter is up-to-date coverage of EU competition law, helping students to understand the latest changes in practice and policy in the UK and European economy.

Thorough revisions to coverage of inflation targeting in Chapters 24 and 25: Chapter 24 has been revised to help students clarify the discussion of monetary policy rules and the ISLM. Revised coverage and new figures have also been added to illustrate shocks to monetary demand, plus a revised section 25.1 on inflation and aggregate demand helps to ensure this difficult topic is clearly explained.

Other developments to improve the explanation of economics topics include:

• A new section in Chapter 4 about calculating price elasticity of demand, with clear explanations of how to use the formulae.
• New box about monopsony to add more in-depth explanation in Chapter 10.
• Additional explanations and definitions of key terms such as demerit goods and median voters in Chapter 16.
• Updates to the coverage of Chapter 18 on nationalised industries, the implications for private firms and regulating private monopolies.
• New coverage of the use of the Consumer Price Index for inflation targeting in Chapter 26, reflecting changes in the activities of the Monetary Policy Committee.
• Revisions to balance of payments and financial account sections in Chapter 28.

New and updated boxes with an international flavour throughout the book. The new edition includes a greater number of examples of economics from around the world, including coverage of China’s industrial revolution (Chapter 19), the economic growth of Dubai (Chapter 30), the stability of Malaysian currency pegged to the US dollar (Chapter 34) and coverage of EU enlargement (Chapter 35). New boxes on topical microeconomics stories include the Sony and Bertelsmann merger, widening access to higher education, and Marks and Spencer’s high street woes. Macroeconomics subjects such as Behavioural Finance (Chapter 13), the UK housing market bubble (Chapter 23) and policies to lower unemployment (Chapter 27) are also new to this edition.