Unit |
Topic/Concept |
Details Covered |
Part A: Introductory Microeconomics |
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Unit 01: Introduction |
Introduction to Economics |
Meaning of micro-economics and macro-economics; positive and normative economics. |
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Central Problems |
What is an economy? Central problems of an economy: what, how and for whom to produce; concepts of Production Possibility Frontier and Opportunity Cost. |
Unit 02: Consumer Equilibrium and Demand |
Consumer Equilibrium |
Utility Approach: One and two commodity cases. |
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Demand |
Market demand, determinants of demand, demand schedule, demand curve, movement along and shifts in demand curve. |
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Price Elasticity of Demand |
Price elasticity of demand, measurement of price elasticity of demand: percentage, total expenditure, and geometric methods. |
Unit 03: Producer Behaviour & Supply |
Production |
Meaning of Production Function (Short-Run and Long-Run); Total product, Average Product and Marginal Product; Returns to a factor. |
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Cost |
Short run costs: Total Cost, Total Fixed Cost, Total Variable Cost; Average Cost; Average Fixed Cost, Average Variable Cost and Marginal Cost - meaning and their relationships. |
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Revenue |
Total Revenue, Average Revenue and Marginal Revenue - meaning and their relationship. |
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Producer's Equilibrium |
Meaning and its conditions in terms of Marginal Revenue-Marginal Cost approach. |
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Supply |
Market supply, determinants of supply, supply schedule, supply curve and its slope, movements along and shifts in supply curve. |
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Price Elasticity of Supply |
Price elasticity of supply; measurement of price elasticity of supply - percentage change method. |
Unit 04: Forms of Market and Price Determination |
Market Forms |
Perfect competition - Features; Determination of market equilibrium and effects of shifts in demand and supply. (Short Run Only) |
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Simple Applications |
Simple Applications of Demand and Supply: Price ceiling, Price floor. |
Part B: Introductory Macroeconomics |
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Unit 05: National Income and Aggregates |
Introduction to Macroeconomics |
What is macro-economics? |
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Basic Concepts |
Consumption goods, capital goods, final goods, intermediate goods; stocks and flows; gross investment and depreciation. |
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Circular Flow & Measurement |
Circular flow of income (two sector model); Methods of calculating National Income: Value Added method, Expenditure and Income methods. |
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Aggregates |
Gross National Product (GNP), Net National Product (NNP), Gross Domestic Product (GDP) and Net Domestic Product (NDP) - at market price, at factor cost; Real and Nominal GDP; GDP Deflator, GDP and Welfare. |
Unit 06: Money and Banking |
Money |
Meaning and functions of money, supply of money (Currency held by the public and net demand deposits held by commercial banks). |
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Commercial Banking |
Money creation by the commercial banking system. |
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Central Banking |
Central bank and its functions (example of Reserve Bank of India): Bank of issue, Govt. Bank, Bankers Bank, Control of Credit through Bank Rate, Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR), Repo Rate and Reverse Repo Rate, Open Market Operations, Margin requirement. |
Unit 07: Determination of Income and Employment |
Aggregate Demand |
Aggregate demand and its components. |
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Consumption & Saving |
Consumption Function- Meaning; Propensity to consume and propensity to save (average and marginal). |
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Equilibrium & Multiplier |
Short-run equilibrium output; investment multiplier and its mechanism. |
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Employment Concepts |
Meaning of full employment and involuntary unemployment. |
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Problems & Measures |
Problems of excess demand and deficient demand; measures to correct them - changes in government spending, taxes and money supply. |
Unit 08: Government Budget and the Economy |
Government Budget |
Government budget - meaning, objectives and components. |
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Classification of Receipts & Expenditure |
Classification of receipts - revenue receipts and capital receipts; Classification of expenditure - revenue expenditure and capital expenditure. |
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Budget Balances & Deficits |
Balanced, Surplus and Deficit Budget; measures of government deficit. |
Unit 09: Balance of Payments |
Balance of Payments Account |
Balance of payments account - meaning and components; Balance of payments Surplus and Deficit. |
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Foreign Exchange Rate |
Foreign exchange rate - meaning of fixed and flexible rates and managed floating. |
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Determination & Systems |
Determination of exchange rate in a free market, Merits and demerits of flexible and fixed exchange rate. Managed Floating exchange rate system. |