Economics - XII

 

Paper I - Theory (80 Marks)

1. Microeconomic Theory (40 Marks)

• Demand: Meaning, factors affecting demand, demand function, Law of Demand, derivation of demand curve, movement and shift in the demand curve, exceptions, and consumer equilibrium through utility and indifference curve analysis.
• Elasticity of Demand: Types (price, income, and cross elasticity), measurement methods (point, percentage, expenditure, geometric), and factors affecting elasticity.
• Supply: Meaning, difference between stock and supply, determinants, Law of Supply, elasticity of supply, and movement and shifts in the supply curve.
• Market Mechanism: Equilibrium and disequilibrium, equilibrium price, and effects of demand and supply changes on equilibrium.
• Concept of Production and Production Function: Returns to a factor, returns to scale, total, average, and marginal physical products, and the Law of Variable Proportions.
• Cost and Revenue: Concepts of fixed, variable, total, marginal, and average costs, opportunity cost, and short-run and long-run cost curves. Revenue types (average, marginal, and total) under perfect and imperfect competition, producer equilibrium.
• Market Forms: Characteristics of perfect competition, monopolistic competition, oligopoly, monopoly, and monopsony. Firm equilibrium in perfect competition (short run and long run).

2. Macroeconomics (40 Marks)

• Theory of Income and Employment:

  • Concepts of demand (ex-ante and effective), aggregate demand and its components, propensity to consume and save, equilibrium output, investment multiplier, full employment, and measures to address excess and deficient demand.

• Money and Banking:

  • Money: Meaning, functions, types of money, supply of money (M0, M1, M2, M3, M4), and inflation (demand-pull and cost-push).
  • Banking: Functions of commercial banks, credit creation, central bank functions, and regulatory roles, including quantitative (CRR, SLR, repo rate) and qualitative tools.

• Balance of Payments and Exchange Rate:

  • Balance of Payments: Meaning, components, causes of disequilibrium, and corrective measures.
  • Foreign Exchange Rate: Determination of flexible exchange rate, fixed and flexible exchange rates, and concepts of depreciation, appreciation, devaluation, and revaluation.

• Public Finance:

  • Fiscal Policy: Meaning and instruments (taxes, public expenditure, public debt, deficit financing).
  • Government Budget: Meaning, types (union and state), components (revenue and capital), and budget deficits (revenue, fiscal, and primary deficits).

• National Income:

  • Circular Flow of Income: Two, three, and four-sector models with leakages and injections.
  • National Income Concepts: Definitions and relationships between GNP, GDP, NNP, private income, personal income, disposable income, National Disposable Income, and per capita income.
  • Methods of Measuring National Income: Product, income, and expenditure methods with simple calculations, along with the difficulties and precautions for each method.

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Paper II - Project Work (20 Marks)

Students are required to complete two projects on any topic covered in theory, each worth 10 marks. The project assessment includes:

• Overall Format: 1 mark
• Content: 4 marks
• Findings: 2 marks
• Viva-voce: 3 marks

Suggested Project Topics

1. Public Sector Enterprise Analysis: Study the role and future of a public sector enterprise, analyzing its growth over the last decade.
2. Socio-Economic Survey: Conduct a survey (sample size of 30 households) on demographics, consumption patterns, and occupational structure.
3. GDP Contribution of Economic Sectors: Compare the contributions of various sectors to GDP growth during the planning period.
4. Aviation Sector Competition: Analyze competition in India’s aviation sector, comparing the performance of public and private airlines and strategies of low-cost carriers.
5. Lending Performance of Banks: Compare the lending performance of five commercial banks over the past six years.
6. Natural Resource Depletion: Examine the effects of resource depletion on the Production Possibility Curve, discussing the impact of technological improvements.
7. Budget Allocation Analysis: Analyze the allocation of financial resources in the Central Government Budget across sectors like agriculture, defense, and education over the past decade.
8. Growth and Productivity of an Industry: Conduct a trend analysis of growth and productivity in an industry such as textiles, automobiles, or telecommunications over the past ten years.

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This syllabus covers advanced concepts in micro and macroeconomics, with practical applications and analytical skills through project work, preparing students for a deeper understanding of economic principles and their impact on real-world issues.