This chapter introduces macroeconomics and the key variables of GDP, inflation, and unemployment. The objective is to develop an analytical framework to explain trends in these variables and how government policies can affect them. Models are used to simplify complex economic relationships and analyze how changes in factors like income, prices, and supply/demand influence equilibrium outcomes. The chapter discusses the supply and demand model of the car market as an example and notes the importance of distinguishing endogenous and exogenous variables. It also introduces the concept of price flexibility versus stickiness and how this impacts the economy in the short versus long run.