Economic Activity has its origins in a course of lectures given since 1950 to first-year undergraduates at the University of Adelaide. That course was originally given by P. H. Karmel; in later years the other two co-authors inherited it. Little attention was paid to financial factors in the first-year course. A second-year course of macroeconomics (given on several occasions by R. H. Wallace) was built upon the first course, and in this the inter-relationships between the financial and production sectors of the economy were considered in detail. The second-year course was set in the context of the particular institutional framework of the Australian economy, and students were introduced to the relevant statistical material. The book draws upon material from both courses, but the discussion of the financial sector is essentially theoretical.

The book is Keynesian in spirit, and designed to give a simplified but rounded exposition of the workings of a modern mixed economy. Final drafts of the book were used for this purpose by G. C. Harcourt in a course of lectures given in the Lent and Michaelmas Terms, 1966, to undergraduates taking Part I of the Economics Tripos at the University of Cambridge. However, the book is designed so that it can be used in courses where the financial system is not considered in detail, and in that case chapters 6, 7 and 13 would be omitted. Chapters 4 to 7 and 10 could be used to cover the macroeconomic sections in an introductory survey course of economics.