Economics Class 12 CBSE (Commerce) CBSE Topics and Syllabus

• Concept of Aggregate Demand and Aggregate Supply 
• Consumption Function and Propensity to Save 

  Consumption Function (Propensity to Consume)

  • Average propensity to consume (APC)
  • Marginal propensity to consume (MPC)

  Propensity to Save (Average and Marginal)

• Equilibrium Output 
• Investment Multiplier and Its Mechanism 
• Meaning of Full Employment 
• Voluntary Unemployment and Involuntary Unemployment 
• Problems of Excess Demand and Deficient Demand 
• Measures to Correct the Excess Demand and Deficient Demand 
• Changes in Government Spending Taxes and Money Supply 
• Unemployment 
• 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 

• Aggregate demand and its components.
• Propensity to consume and propensity to save (average and marginal). Short-run equilibrium output; investment multiplier andits mechanism. Meaning of full employment and involuntary unemployment.
• Problems of excess demand and deficient demand; measures to correct them - changes in government
  spending, taxes and money supply.

• Concept of National Income 
• Basic Concepts - Consumption Goods 
• Basic Concepts - Capital Goods 
• Basic Concepts - Final Goods 
• Basic Concepts - Intermediate Goods 
• Meaning of Investment 
• Depreciation 
  • Meaning
  • Definition
  • Importance
• Basic Concepts - Gross Investment 
• Basic Concepts - Net Investment 
• Basic Concepts - Stocks and Flows 
• Circular Flow of Income (Two Sector Model) 
• Methods of Calculating National Income - Value Added Or Product Method 
• Methods of Calculating National Income - Expenditure Method 
• Methods of Calculating National Income - Income Method 
• Aggregates Related to National Income - Gross National Product (GNP) 
• Aggregates Related to National Income - Net National Product (NNP) 
• Gross and Net Domestic Product (GDP and NDP) 
• GDP and Welfare 
• Aggregates related to National Income - Private Income 
• Aggregates Related to National Income - Personal Income 
• Aggregates Related to National Income - Personal Disposable Income 
• Aggregates Related to National Income - Domestic Income (NDP) 
• National Disposable Income (Gross and Net) 
• Aggregates Related to National Income - Gross Value Added and Net Value Added 
• Real and Nominal GDP 
• Macroeconomic Identities 
• Methods of Calculating National Income - Factor Cost, Basic Prices and Market Prices 

• Some basic concepts: consumption goods, capital goods, final goods, intermediate goods; stocks and flows; gross investment and depreciation.
• Circular flow of income; Methods of calculating National Income - Value Added or Product method, Expenditure method, Income method.
• Aggregates related to National Income: Gross National Product (GNP), Net National Product (NNP),
  Gross and Net Domestic Product (GDP and NOP) - at market price, at factor cost; National Disposable Income (gross and net), Private Income, Personal Income and Personal Disposable Income; Real and Nominal GDP. 
• GDP and Welfare

• Emergence of Macroeconomics 
• Context of the Present Book of Macroeconomics 

• Meaning of Money 
• Function of Money - Primary Function 
  • Medium of exchange
  • Measure of value
• Function of Money - Secondary Functions 
• Standard of Deferred Payment 
• Money - Store of Value 
• Money - Transfer of Value 
• Meaning of Supply of Money 
• Concept of Barter Exchange 
• Difficulties Involved in the Barter Exchange 
• Monetary Payments 
• Commercial Banks 
• Currency Held by the Public and Net Demand Deposits Held by Commercial Banks 
• Money Creation Or Credit Creation by the Commercial Banking System 
• Definition - Central Bank 
• Function of Central bank - Bank of Issue 
• Central bank Function - Goverment Bank 
• Central Bank Function - Banker's Bank 
• Central Bank Function - Controller of Credit 
• 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 
• Demand for Money 
• Policy Tools to Control Money Supply 
• Money Creation by Banking System 
  • Balance Sheet of a Fictional Bank 
  • Limits to Credit Creation and Money Multiplier 

• Money -its meaning and functions.
• Supply of money - Currency held by the public and net demand deposits held by commercial banks.
• Money creation by the commercial banking system.
• Central bank and its functions (example of the Reserve Bank of India): Bank of issue, Govt. Bank, Banker's Bank, Control of Credit through Bank Rate, CRR, SLR, Repo Rate and Reverse Repo Rate, Open Market Operations, Margin requirement.

• Concept of Balance of Payments Account 
  • Meaning of Balance of Payments Account
  • Components of Balance of Payments Account
• Measure to Control Disequilibrium 
• Balance of Payments Deficit Meaning 
• Systems of Exchange Rates 
  • Fixed exchange rate
  • Flexible exchange rate
• Concept of Foreign Exchange Rate 
  • Meaning of Foreign Exchange Rate
  • Meaning of Fixed and Flexible Rates and Managed Floating
  • Determination of Equilibrium Foreign Exchange Rate
• Determination of Exchange Rate in a Free Market 
• Devaluation of a Currency 
• Revaluation of a Currency 
• Balance of Trade 
• 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 

• Balance of payments account - meaning and components; balance of payments deficit-meaning.
• Foreign exchange rate - meaning of fixed and flexible rates and managed floating. Determination of exchange rate in a free market.

• Meaning of Government Budget 
• Objectives of Government Budget 
• Components of Budget 
  • Capital Budget
  • Expenditure
  • Reciept
  • Revenue Budget
• Classification of Receipts 
  •  Revenue Receipts
  • Capital Receipts
• Classification of Expenditure 
  • revenue expenditure 
  • capital expenditure
• Types of Budget 

  Balance Budget

  Deficit Budget

  Surplus Budget

• Types of Budget - Budget Deficit 
• Measures of Government Deficit Or Surpluses 
  • Revenue Deficit
  • Fiscal Deficit
  • Budgetary Deficit
• Direct and Indirect Tax 
• Government Budget - Allocation of Resources 
• Deficit Budget - Primary Deficit 
• Meaning of Disinvestment 

• Government budget - meaning,objectives and components.
• Classification of receipts - revenue receipts and capital receipts
• Classification of expenditure - revenue expenditure and capital expenditure.
• Measures of government deficit - revenue deficit, fiscal deficit, primary deficit their meaning.

• Introduction to Indian Economy on the Eve of Independence 
• Low Level of Economic Development Under the Colonial Rule 
• Agricultural Sector 
• Industrial Sector 
• Foreign Trade 
• Demographic Condition 
• Occupational Structure 
• Infrastructure 

• Introduction to Indian Economy 1950-1990 
• Common Goals of Five Year Plans 
  • Growth
  • modernisation
  • self-reliance
  • equity
• Agriculture 
  • Institutional aspects and new agricultural strategy, etc.
  • Land Reforms
  • Land ceiling
  • The Green Revolution
  • Marketed surplus
  • The Debate Over Subsidies
• Industry and Trade 
  • Public and Private Sectors in Indian Industrial Development
  • Industrial Policy Resolution 1956 (IPR 1956)
  • Small-Scale Industry
• Trade Policy: Import Substitution 
  • Effect of Policies on Industrial Development

• Liberalisation, Privatisation and Globalisation : an Appraisal 
• Liberalisation 
  • export-import policy
  • foreign exchange markets
  • Deregulation of Industrial Sector
  • Financial Sector Reforms
  • stock exchange
  • Foreign Institutional Investors (FII)
  • Tax Reforms
  • Foreign Exchange Reforms
  • Trade and Investment Policy Reforms
  • Import licensing
  • Export duties
• Privatisation 
  • disinvestment
• Globalisation 
  • Outsourcing
  • World Trade Organisation (WTO)
  • Multilateral Trade Agreements
  • Bilateral
  • Non-Tariff Barriers
• Indian Economy During Reforms: an Assessment 
  • Foreign Direct Investment (FDI)
  • Foreign Institutional Investment (FII),
  • Growth and Employment
  • Reforms in Agriculture
  • Reforms in Industry
  • Disinvestment
  • Reforms and Fiscal Policies

• Poverty 
• Identification of Poor People 
  • Categorising Poverty

  • always poor
  • usually poor
  • chronic poor
  • churning poor
  • occasionally poor
  • transient poor
  • non-poor

  • The Poverty Line
• The Number of Poor in India 
• Causes Poverty 
• Policies and Programmes Towards Poverty Alleviation 
• Main Programmes for Poverty Alleviation - a Critical Assessment 

• Human Capital Formation in India 
• Sources of Human Capital 
  • Preventive medicine
  • curative medicine
  • social medicine
  • on-the job- training
  • migrate
  • information
  • Human Capital and Economic Growth
• Human Capital and Human Development 
• State of Human Capital Formation in India 
• Growth of Education Sector in India 
  • Growth in Government Expenditure on Education
  • Educational Achievements in India
• Future Prospects 
  • Education for All — Still a Distant Dream
  • Gender Equity — Better than Before
  • Higher Education — a Few Takers

• Rural Development 
• Credit and Marketing 
  • Credit
  • Rural Banking — a Critical Appraisal
• Agricultural Market System 
  • Emerging Alternate Marketing Channels
• Agricultural Diversification 
  • agro-processing industries
  • Animal Husbandry
  • Fisheries
  • Horticulture
  • Other Alternate Livelihood Options
• Sustainable Development and Organic Farming 
  • Benefits of Organic Farming

• Employment: Growth, Informalisation and Other Issues 
• 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 
• Employment - Informalisation 
• Employment - Workforce 
• Unemployment 
• Government and Employment Generation 

• Infrastructure 
• Relevance of Infrastructure 
• The State of Infrastructure in India 
• Energy 
  • Sources of Energy
  • Non-conventional Sources of Energy
  • Consumption Pattern of Commercial Energy
  • Power/Electricity
  • Some Challenges in the Power Sector
• Health 
  • State of Health Infrastructure
  • Private Sector Health Infrastructure
  • Indian Systems of Medicine (ISM)
  • Indicators of Health and Health Infrastructure—A Critical Appraisal
  • Urban-Rural and Poor-Rich Divide
  • Women’s Health

• Environment and Sustainable Development 

  • Introduction

  • Environment - Definition and Functions

• State of India’s Environment 
• Sustainable Economic Development Meaning 
• Strategies for Sustainable Development 
  • Use of Non-conventional Sources of Energy
  • LPG, Gobar Gas in Rural Areas
  • CNG in Urban Areas
  • Wind Power
  • Solar Power through Photovoltaic Cells
  • Mini-hydel Plants
  • Traditional Knowledge and Practices
  • Biocomposting
  • Biopest Control

• Meaning of Micro and Macro Economics 
• What is an Economy? 
• Positive and Normative Economics 
• Central Problems of an Economy 

  What is produced and in what quantities?

  How are these goods produced?

  For whom are these goods produced?

• Concepts of Production Possibility Frontier 
• Concept of Opportunity Cost 
• Understanding Economics - Adam Smith (Father of Economic) 
• Understanding Economics - Dr Alfred Marshall 
• Understanding Economics - Lord Robbins 
• Understanding Economics - Prof Samuelson 
• Types of Economic System - Capitalism 
• Types of Economic System -socialism 
• Efficient Utilization of Resource 
• A Simple Economy 
• Organisation of Economic Activities 
  • The Centrally Planned Economy 
  • The Market Economy 

• Meaning of microeconomics and macroeconomics, Positive and Normative Economics.
• What is an economy? Central problems of an economy: what, how and for whom to produce; concepts of production possibility frontier and opportunity cost.

• Comparative Development Experiences of India and Its Neighbours 
• Developmental Path - a Snapshot View 
  • China
  • Pakistan
• Demographic Indicators 
• Gross Domestic Product and Sectors 
• Indicators of Human Development 
• Development Strategies - an Appraisal 

• Consumer'S Equilibrium 
• Meaning of Utility 
• Total Utility and Marginal Utility 
• Diminishing Marginal Utility 
• Conditions of Consumer's Equilibrium Using Marginal Utility Analysis 
• Consumer's Budget 
  • budget set
  • budget line
  • Changes in the Budget Set
• Preferences of the Consumer 
  • indifference curve
  • indifference curve
• Cardinal Approach (Utility Analysis) 
• Ordinal Approach (Utility Analysis) 
• Demand 

  Demand

  1.  Demand Curve and the Law of Demand
  2. Deriving a Demand Curve from Indifference
  3. Curves and Budget Constraints 
  4.  Normal and Inferior Goods 
  5.  Substitutes and Complements 
  6.  Shifts in the Demand Curve 
  7. Movements along the Demand Curve and Shifts 
     in the Demand Curve
• Market Demand 
• Change in Demand 
• Change in Quantity Demand 
• Determinants of Demand 
• Demand Schedule 
• Demand Curve and Its Slope 
  • Demand Curve and Its Slope
  • Law of Demand
• Movement Along and Shifts in the Demand Curve 
• Elasticity of Demand 

  Elasticity of Demand

  •  Elasticity along a Linear Demand Curve
  • Factors Determining Price Elasticity of Demand for a Good
  • Elasticity and Expenditure
• Type of Elasticity of Demand 
• Factors Affecting Price Elasticity of Demand 
• Degrees of Elasticity of Demand 
• Measurement of Elasticity of Demand 
  • Geometric Method
  • Percentage-change Method
  • Point Method
  • Total Expenditure Method
• Marginal Rate of Substitution (MRS) 
• Indifference Curve 

• Consumer's equilibrium - meaning of utility, marginal utility, law of diminishing marginal utility, conditions of consumer's equilibrium using marginal utility analysis.
• Indifference curve analysis of consumer's equilibrium-the consumer's budget (budget set and budget line), preferences of the consumer (indifference curve,indifference map) and conditions of consumer's equilibrium.
• Demand, market demand, determinants of demand, demand schedule, demand curve and its slope, movement along and shifts in the demand curve; price elasticity of demand - factors affecting price elasticity of demand; measurement of price elasticity of demand - (a) percentage­ change method and (b) geometric method (linear demand curve); relationship between price elasticity of demand and total expenditure.

• Meaning of Production Function 
• Production Function - Short-run 
• Production Function - Long-run 
• Concept of Production 
• Total Product 
• Average Product 
• Marginal Product 
• Relation Between Total, Average and Marginal Product 
• Law of Variable Proportions 
• Average and Marginal Physical Products 
• Returns to a Factor 
• Basic Concepts of Cost 
• Cost - Short Run Costs 
• Cost - Fixed Cost 
• Cost -variable Cost 
• Cost - Total Cost 
• Cost - Total Fixed Cost 
• Cost - Total Variable Cost 
• Cost - Average Cost 
• Cost - Average Fixed Cost 
• Cost - Average Variable Cost 
• Cost - Marginal Cost 
• Relationship Between Average Variable Cost and Average Total Cost and Marginal Cost 
• Concept of Opportunity Cost 
• Total, Average and Marginal Revenue 
• Concept of Producer's Equilibrium 
  • Meaning of Producer's Equilibrium
  • Producer's Equilibrium Conditionsin Terms of Marginal Revenue-marginal Cost.
• Concept of Supply 
  • Law of Supply
  • Price Elasticity of Supply
• Market Supply 
• Difference Between Stock and Supply 
• Determinants of Supply 
• Supply Curve and Schedule 
  • Supply Curve and Its Slope
  • Supply Schedule
• Movements Along and Shifts in Supply Curve 
• Measurement of Price Elasticity of Supply - Percentage-change Method 
• Measurement of Price Elasticity of Supply - Geometric Method 
• Total, Average and Marginal Cost 
• The Law of Diminishing Marginal Product 
• Shapes of Product Curves 

  Shapes of Total Product, Marginal Product and Average Product Curves

• Costs - Long Run Costs 
• Returns to Scale 

• Meaning of Production function - Short-Run and Long-Run
• Total Product, Average Product and Marginal Product. Returns to a Factor 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.
• Revenue - total, average and marginal revenue - meaning and their relationships.
• Producer's equilibrium-meaning and its conditionsin terms of marginal revenue-marginal cost.
• Supply, market supply, determinants of supp y, supply schedule, supply curve andits slope, movements along and shifts in supply curve, price elasticity of supply; measurement of price elasticity of supply - (a) percentage-change method and (b) geometric method.

• Meaning and Features of Market 
• Market Equilibrium 

  Equilibrium, Excess Demand, Excess Supply

  • Market Equilibrium: Fixed Number of Firms
  • Market Equilibrium: Free Entry and Exit
• Determination of Market Equilibrium 
• Effects of Shifts in Demand and Supply 
• Features of Perfect Competition 
• Market Forms - Imperfect Competition 
• Main Market Forms 
  • Market Forms - Monopoly
  • Market Forms - Oligopoly
  • Market Forms - Monopolistic Competition
  • Market Forms - Perfect Competition
• Features of Oligopoly 
• Market Forms - Perfect Oligopoly 
• Market Forms - Imperfect Oligopoly 
• Equilibrium Price 
• Simple Applications of Demand and Supply 
• Price Ceiling 
  • Maximum and Minimum
• Price Floor 
• Revenue 
• Profit Maximisation 

  Profit Maximisation

  • Condition 1
  • Condition 2
  • Condition 3 
  • The Profit Maximisation Problem: Graphical Representation
• Determinants of a Firm’s Supply Curve 

  Determinants of a Firm’s Supply Curve

  • Technological Progress
  • Input Prices
• Market Supply Curve 
• Price Elasticity of Supply 

• Perfect competition - Features; Determination of market equilibrium and effects of shifts in demand and supply.
• Other Market Forms - monopoly, monopolistic competition, oligopoly - their meaning and features.
• Simple Applications of Demand and Supply: Price ceiling, price floor.

• Simple Monopoly in the Commodity Market 

  Simple Monopoly in the Commodity Market

  • Market Demand Curve is the Average Revenue Curve
  • Total, Average and Marginal Revenues
  • Marginal Revenue and Price Elasticity of Demand
  • Short Run Equilibrium of the Monopoly Firm
• Other Non - Perfectly Competitive Markets 

  Other Non-perfectly Competitive Markets

  • Monopolistic Competition
  • How do Firms behave in Oligopoly?

Simple Monopoly in the Commodity Market

• Market Demand Curve is the Average Revenue Curve
• Total, Average and Marginal Revenues
• Marginal Revenue and Price Elasticity of Demand
• Short Run Equilibrium of the Monopoly Firm

Other Non-perfectly Competitive Markets

• Monopolistic Competition
• How do Firms behave in Oligopoly?