The third edition of Understanding the Economic Environment is written specifically for the 520 Economic Environment prescription in the New Zealand Diploma in Business. The third edition clearly explains and illustrates the essential tools of economic analysis and applies them to a range of contemporary issues. The text provides students with a step-by-step introduction to the key elements of economic theory. It enables an integrated understanding of the New Zealand economy as it functions as part of the global economic system. Students are not only encouraged to understand and apply the economic principles they are learning but also to use their judgement to critically evaluate those principles as they relate to business decision-making and government economic policy.