Topics
National Income and Related Aggregates
- Macroeconomics Vs Microeconomics
- Representative Goods and Sectors
- Macroeconomic Agents and Government Role
- Emergence of Macroeconomics
- Context of the Present Book of Macroeconomics
- Meaning of Economic Wealth and Final Goods
- Stocks, Flows, and Depreciation
- Capital Formation, Trade-off & Circular Flow of Income
- Circular Flow of Income and Methods of Calculating National Income
- Output Method/Product Method
- Expenditure Method
- Income Method
- Factor Cost, Basic Prices and Market Prices
- Some Macroeconomic Identities
- National Disposable Income
- Private Income
- National Income Aggregates
- Real GDP and Nominal GDP
- GDP and Welfare
Introductory Macroeconomics
Introduction
- A Simple Economy
- Central Problems of an Economy
- Concepts of Production Possibility Frontier
- Organisation of Economic Activities
- Positive and Normative Economics
- Macroeconomics Vs Microeconomics
Development Experience (1947-90) and Economic Reforms since 1991
- India's Economy Before Independence
- Low Level of Economic Development Under the Colonial Rule
- Agricultural Sector in India
- Industrial Sector
- Foreign Trade of India
- Demographic Condition
- Occupational Structure
- Infrastructure
- Post-Independence Economic Systems and Planning
- Five Year Plans (FYP)
- Agriculture
- Industry and Trade
- Trade Policy: Import Substitution
- The 1991 Economic Crisis and Reforms
- Background of the New Economic Policy
- Liberalisation
- Privatisation
- Globalisation
- World Trade Organisation (WTO)
- Impact of the Economic Reforms
Current Challenges Facing Indian Economy
- Concept of Human Capital
- Sources of Human Capital
- Human Capital and Economic Growth
- Human Capital and Human Development
- State of Human Capital Formation in India
- Growth of Education Sector in India
- Challenges and Future Prospects in Education
- Rural Development in India
- Credit and Marketing in Rural Areas
- Agricultural Market System
- Diversification into Productive Activities
- Sustainable Development and Organic Farming
- The Nature and Importance of Work in Society
- Workers and Employment
- Participation of People in Employment
- Self-employed and Hired Workers
- Employment in Firms, Factories and Offices
- Growth and Changing Structure of Employment
- Informalisation of Indian Workforce
- Concept of Unemployment
- Government and Employment Generation
- Environment and Sustainable Development in India
- State of India’s Environment
- Concept of Sustainable Development
- Strategies for Sustainable Development
Money and Banking
- Concept of Money
- Functions of Money
- Demand for Money and Supply of Money
- Money Creation by Banking System
- Limits to Credit Creation and Money Multiplier
- Policy Tools To Control Money Supply
- Demand and Supply for Money : A Detailed Discussion
- The Transaction Motive
- The Speculative Motive
- Various Measures of Supply of Money
- Narrow and Broad Money
- Demonetisation
Theory of Consumer Behaviour
- Consumer Behaviour: The Problem of Choice
- Basic Concepts of Microeconomics > Utility
- Cardinal Approach (Utility Analysis)
- Derivation of Demand Curve in the Case of a Single Commodity
- Ordinal Utility Analysis/Indifference Curve Analysis
Indian Economic Development
Determination of Income and Employment
- Aggregate Demand and Its Components
- Consumption
- Investment
- Determination of Income in Two-sector Model
- Determination of Equilibrium Income in the Short Run
- Macroeconomic Equilibrium with Price Level Fixed
- Effect of an Autonomous Change in Aggregate Demand on Income and Output
- The Multiplier Mechanism
- Paradox of Thrift
- Equilibrium Output and Employment
Development Experience of India – a Comparison with Neighbours
Introductory Microeconomics
Production and Costs
- Production Function
- Basics of Production Theory
- Variation of Output in the Short-Run Returns to a Factor
- Relation Between Total, Average and Marginal Product
- Law of Variable Proportions
- Average and Marginal Physical Products
- Changes in Production
- Cost - Fixed Cost
- Cost -variable Cost
- Behaviour of Cost in the Short - Run
- Relationship Between Average Variable Cost and Average Total Cost and Marginal Cost
- Concept of Opportunity Cost
- Marginal Revenue
- Producer's Equilibrium
- Law of Supply
- Market Supply Schedule
- Distinguish between Stock and Supply
- Determinants of Supply
- Movements Along and Shifts in Supply Curve
- Measurement of Elasticity of Supply
- Methods of Measurement of National Income
- Cost Concepts > Marginal Cost
- The Law of Diminishing Marginal Product
- Shapes of Product Curves
- Costs in Long Run Period
- Returns to Scale
The Theory of the Firm Under Perfect Competition
- Concept of Market
- Market Equilibrium
- Determination of Market Equilibrium
- Effect of Simultaneous change in Demand and Supply on Equilibrium Price
- Perfect Competition
- Imperfect Competition
- Classification of Market Structure
- Oligopoly
- Market Forms - Perfect Oligopoly
- Market Forms - Imperfect Oligopoly
- Equilibrium Price
- Applications of Tools of Demand and Supply Price Control
- Price Ceiling
- Price Floor
- Revenue Concepts
- Profit Maximisation Objective
- Determinants of a Firm’s Supply Curve
- Market Supply Schedule
- Price Elasticity of Supply
Government Budget and the Economy
Market Equilibrium
- Simple Monopoly in the Commodity Market
- Other Non - Perfectly Competitive Markets
Balance of Payments
- Open Economy and Its Linkages
- Concept of Balance of Payments
- Current Account
- Capital Account
- Balance of Payments Surplus and Deficit
- Foreign Exchange Market
- Foreign Exchange Rate
- Determination of the Exchange Rate
- Merits and Demerits of Flexible and Fixed Exchange Rate Systems
- Managed Floating Exchange Rate System
Estimated time: 15 minutes
CBSE: Class 12
National Testing Agency: Class 12
National Testing Agency: Class 12
Meaning of Current Account
The current account records trade in goods and services and transfer payments between a country and the rest of the world.
CBSE: Class 12
National Testing Agency: Class 12
National Testing Agency: Class 12
Components of Current Account
| Component | Description |
|---|---|
| Goods (Visible Items) | Exports and imports of physical goods. |
| Services (Non-factor Invisibles) | Tourism, banking, insurance, transportation, software services, etc. |
| Factor Income (Factor Invisibles) | Wages, profits, interest, rent, etc., earned from or paid abroad. |
| Unilateral Transfers | One-way payments with no return - gifts, remittances, grants, donations, etc. |
CBSE: Class 12
IMF BPM6 Classification
The IMF's BPM6 classifies the Balance of Payments (BOP) into:
- Current Account
- Capital Account
- Financial Account
India has adopted the BPM6 classification.
However, the RBI continues to publish Balance of Payments data according to the old classification.
CBSE: Class 12
Balance on Current Account
| Situation | Condition | Implication |
|---|---|---|
| Surplus | Receipts > Payments | Country is a net lender. |
| Balanced | Receipts = Payments | No net lending or borrowing. |
| Deficit | Receipts < Payments | Country is a net borrower. |
The balance has two components:
- Balance of Trade (BOT)
- Balance on Invisibles
CBSE: Class 12
Balance of Trade (BOT)
Difference between the value of exports and imports of goods.
- BOT Surplus: Exports > Imports
- BOT Deficit: Imports > Exports
CBSE: Class 12
Balance on Invisibles
Covers:
- Services
- Factor income
- Unilateral transfers
CBSE: Class 12
National Testing Agency: Class 12
National Testing Agency: Class 12
Accounting Rules — Current Account Entries
| Transaction | Entry |
|---|---|
| Export of goods/services | Credit (+) |
| Import of goods/services | Debit (−) |
| Receipt of unilateral transfers | Credit (+) |
| Payment of unilateral transfers | Debit (−) |
CBSE: Class 12
National Testing Agency: Class 12
National Testing Agency: Class 12
Key Points: Current Account
- The current account records transactions in goods, services, factor income, and unilateral transfers.
- Goods are the visible component; services, factor income, and transfers are invisible components.
- IMF's BPM6 classifies BOP into Current, Capital, and Financial Accounts. India has adopted this classification, but the RBI continues to publish data according to the old classification.
- Current Account Surplus → Country is a net lender; Current Account Deficit → Country is a net borrower.
- Balance of Trade covers only goods; Balance on Invisibles covers services, factor income, and transfers.
- Exports and receipts are Credits (+); Imports and payments are Debits (−).
Related QuestionsVIEW ALL [5]
Identify the correct matched pair from Column A to Column B and choose the correct alternative:
| Column A | Column B |
| 1. Export of weapons to Vietnam | (a) Credit side of Current Account |
| 2. Import of Apache Helicopter from USA | (b) Capital Account of Balance of Payments |
| 3. Remittances from relative from UAE | (c) Debit side of Current Account of Balance of Payments |
| 4. Investment by Tesla Incorporation in India | (d) Credit side of Current Account of Balance of Payments |
