Aims:

1. To enable candidates to acquire knowledge (information) and develop an understanding of facts, terms, concepts, conventions, trends, principles, generalisations, assumptions, hypotheses, problems, processes, etc. in Economics.

2. To acquaint candidates with tools of economic analysis.

3. To develop an understanding of important economic problems.

4. To acquaint candidates with the main institutions through which the productive process is carried out.

5. To develop an understanding of the role of institutions in the functioning of an economy.

6. To enable candidates to compare their own economic structure with that of the other areas of the world.

CLASS XI

There will be one paper of 3 hours duration of 100 marks divided into 2 parts.

Part 1 (30 marks) will consist of compulsory short answer questions testing knowledge, application and skills relating to elementary/ fundamental aspects of the entire syllabus.

Part 2 (70 marks) will consist of eight questions out of which the candidate will be required to answer five questions. Each question in this Part shall carry 14 marks.

Note: The syllabus is intended to reflect a study of the theory of Economics with specific reference to the Indian Economy. Therefore, examples and specific references to the Indian Economy must be made wherever relevant.

1. Understanding Economics

(i) Definition of Economics: Adam Smith, Alfred Marshall, Lionel Robbins, Samuelson.

Basic understanding of economics and economic phenomena to be explained especially in the context of the concept of scarcity and allocation of resources. Students may be introduced to the main points on which the various definitions of economics could be analyzed. Features of definitions and two- three criticisms.

(ii) Micro and Macro Economics – Meaning and Difference. Basic concepts: utility, price, value, wealth, welfare, money, market, capital, investment, income, production, consumption, saving, Business cycle, Aggregate demand and Aggregate supply.

Meaning and difference between Micro and Macro Economics. A conceptual understanding of the terms: utility – types and features, total utility, marginal utility and diminishing marginal utility; price – definition and general rise and fall in price; value – real vs nominal value; wealth – explanation of the term, classification (personal and social); welfare – economic welfare, social welfare and relation between wealth and welfare; money – barter economy vs money economy; market – meaning and size; capital – meaning; investment – meaning, investment as a process of capital formation; income – meaning, factor incomes; production – meaning; consumption – meaning; Concept of sustainable consumption, saving – meaning and saving vs savings.

The above terms to be explained with the help of relevant examples.

(iii) Basic problems of an economy: what to produce; how to produce; for whom to produce; efficient use of resources; economic growth and development.

The basic problem of scarcity and choice must be emphasized. As this problem is universal in character, i.e. faced by all economies, irrespective of the economic system they follow, it must be explained using the concept Production Possibility Curve. The three problems – what to produce, how to produce and for whom to produce – must be highlighted. The role of technology and a shift in the Production Possibility Curve must be explained. A brief explanation of the term ‘economic growth’, ‘economic development’ and distinction between the two is required.

(iv) Types of economies: developed, under developed and developing; Economic systems: capitalism, socialism and mixed economy; mechanism used to solve the basic problems faced by each economy.

Characteristics of developed and developing economies; Development experience of India: a comparison with neighbouring country (China) in terms of growth, population and sectoral development (introducing regional and global economic grouping such as SAARC, European Union, ASEAN, G-8, G-20 – basic knowledge); different types of economic systems; definition, features, merits and demerits of capitalism, socialism and mixed economic system; mechanisms used to solve the basic problems under each economic system to be explained with the help of case studies. The role of government along with the price mechanism to be emphasized.

2. Indian Economic Development

(i) Introduction

A brief introduction of the state of the Indian Economy on the eve of independence. Main features, problems and policies of agriculture, industry and foreign trade.

(ii) Parameters of Development

Parameters of development: per capita income and human development index.

(iii) Planning and economic development in India

Objectives, achievements and drawbacks of different five year plans in India (A brief account).

(iv) Structural Changes in the Indian Economy after liberalization

Present features of Indian Economy. Need, meaning, significance and features of liberalization, globalization and privatization of Indian Economy; disinvestment.

(v) Current challenges facing Indian Economy

Poverty – absolute and relative, main programmes for poverty alleviation: A critical assessment, rural development. Key issues – Credit and marketing – role of cooperatives, agricultural diversification, alternate farming – organic farming.

Human Capital formation: How people become resource; role of human capital in economic development; Growth of education sector in India Employment, Growth normalization and other issues, Problem and policies.

Sustainable Economic Development: Meaning, effects of Economic Development on Resources and Environment.

(vi) Economic growth and development

Economic Growth and Development – Meaning and difference. Comparative study of Indian and Chinese Economy on the following indicators: (a) Unemployment (b) GDP growth (c) GDP per capita and GDP PPP (d) direct foreign investment (e) inflation (f) poverty.

(vii) Sustainable Development

Understanding the concept, need for sustainable development for improving the quality of life – looking at the deteriorating quality of air, water, food over time, developing an appreciation to sustain at least what exists for the generations to come.

3. Statistics

(i) Statistics: definition, scope and limitations of statistics.

Statistics: definition, scope and limitations of statistics. Special emphasis to be laid on importance of statistics in economics.

(ii) Collection, organization and presentation of data.

Collection of data – Source of data: primary, secondary. Methods of collecting data: Some important sources of collecting secondary data; ways of collecting primary data; presentation of data: tabular and diagrammatic presentation(bar diagram, pie, line, histogram, polygon and ogive curve).

(iii) Measures of Central Value: average defined; type of averages: arithmetic mean; simple and weighted; median and mode; ungrouped and grouped data; numericals, relationship between mean, median and mode.

Measures of Central Value: average defined; type of averages: arithmetic mean; simple and weighted; median and mode; ungrouped and grouped data. Numericals only on mean, median and mode for both ungrouped and grouped data. Relationship between mean, median and mode – the nature of the frequency distribution – symmetrical, positively skewed and negatively skewed.

(iv) Measures of dispersion: definition, methods of studying variation – range; standard deviation; the mean or average deviation; coefficient of variation.
Numericals on measures of dispersion required.

(v) Correlation: introduction, scatter diagram; Karl Pearson’s coefficient of correlation; Spearman’s coefficient of correlation.

Meaning and significance of correlation to be explained along with types and degrees. Scatter diagram, Karl Pearson’s method (two variables, ungrouped data); Spearman’s Rank Correlation.

(vi) Index numbers: simple and weighted – meaning, types and purpose. Problems involved in constructing a Price Index Number.

What does an Index number show, measure or indicate (like a Price Index Number). Difference between simple and weighted – Price weighted or quantity weighted. Laspayre’s, Paasche and Fisher’s index numbers. Problems involved in constructing Price Index Number – the choice of the base year, the number of commodities to be included (coverage), choice of prices and the method to be used.

PROJECT WORK

In addition to the syllabus prescribed for Classes XI & XII, candidates at Class XI ONLY are also required to complete one of the following projects:

1. Consumer awareness amongst households through designing a questionnaire and collection of primary data.

2. Productivity awareness among enterprises through use of statistical data from statistical tables published in Newspapers / RBI Bulletin / Budget /Census report / Economic survey, etc.

3. Study of a cooperative institution like milk cooperatives / credit cooperatives, etc.

The project is to be internally assessed at Class XI level only.

CLASS XII

There will be one paper of 3 hours duration of 100 marks divided into 2 parts.

Part 1 (30 marks) will consist of compulsory short answer questions testing knowledge, application and skills relating to elementary/ fundamental aspects of the entire syllabus.

Part 2 (70 marks) will consist of eight questions out of which the candidate will be required to answer five questions. Each question in this Part shall carry 14 marks.

Note: The syllabus is intended to reflect a study of the theory of Economics with specific reference to the Indian Economy. Therefore, examples and specific references to the Indian Economy must be made wherever relevant.

1. Micro Economic Theory

(i) Demand: meaning, factors affecting demand; Demand function; Law of Demand; derivation of demand curve; movement and shift of the demand curve; exceptions to the Law of Demand.

Law of Diminishing Marginal Utility, Law of Equimarginal Utility, consumers equilibrium through utility approach.

The concept of demand (exante) and effective (expost) demand. A demand function to be specified incorporating the determinants of demand. Diagrams should be used in explaining the Law of Demand, its derivation using demand schedule. Derivation of market demand curve from individual demand curve.

Law of Diminishing Marginal Utility, Law of Equimarginal Utility and consumer’s equilibrium with the help of schedule and graph.

(ii) Elasticity of demand: meaning, types of elasticity of demand, measurement of elasticity of demand; factors affecting elasticity of demand; importance of the concept of elasticity of demand.

Various methods of measurement of the elasticity of demand: point method, percentage method, expenditure method and geometric method. (Numericals required on percentage method only). The cross and income elasticity of demand must be explained. Use diagrams wherever necessary. Degrees of elasticity of demand to be explained.

(iii) Supply: meaning; difference between stock and supply; determinants of supply; time period and supply; Law of Supply; movement and shift of the supply curve; elasticity of supply

Difference between stock (actual supply) and supply (intended supply) with reference to the time period, with the help of certain examples. A supply function should be specified and explained. Law of Supply, supply schedule and supply curve. Derivation of market supply curve from individual supply curve. Movement and shift of the supply curve, exceptions to the Law of Supply. Meaning and degrees of elasticity of supply (methods of measuring elasticity of supply are not to be included).

(iv) Market Mechanism: Equilibrium and disequilibrium; Equilibrium price and effect of changes in demand and supply on the equilibrium price. Simple applications of tools of demand and supply.

A basic understanding of the concept of equilibrium. The effects of changes in demand and supply – both along the curves and shift of the curves to be explained. Basic understanding of Price control, rationing, Price ceiling with the help of demand and supply curves.

(v) Concept of product and production function: returns to a factor, total, average and marginal physical products; Law of Variable Proportions and its three stages; returns to scale.

A production function to be specified and explained (concept only – specific production function not required). Law of Variable Proportions: statement, assumptions, schedule (for the purpose of understanding and not for testing), diagram and explanation to the three stages and criticism. A comparison should be made between Law of Variable Proportion and the returns to scale concepts.

(vi) Main market forms: perfect competition, monopolistic competition, oligopoly, monopoly, monopsony; characteristics of the various market forms; equilibrium of firm under short run and long run under perfect competition.

Features of perfect competition, monopolistic competition, oligopoly, monopoly and monopsony. Equilibrium of firms under short run and long run, under perfect competition (to be explained with the help of diagrams).

(vii) Cost and revenue: Basic concepts of cost; fixed cost, variable cost, total cost, marginal cost and average cost – their relationships; opportunity cost; short run and long run cost curves – internal and external economies and diseconomies. Revenue: meaning; average revenue, marginal revenue and total revenue and their relationships under perfect competition and imperfect competition, Producer’s equilibrium.

Basic concepts – private cost, economic cost, social cost, money cost, real cost, explicit cost, implicit cost.

Cost concepts – Fixed cost, variable cost, total cost, marginal cost, average cost with schedule and diagram; relationship between average cost, marginal cost, total cost. Opportunity cost – meaning only. Difference between accounting cost and opportunity cost.

Revenue – Average revenue, marginal revenue, total revenue – concepts and relationships under perfect competition and imperfect competition. Producer’s equilibrium – meaning, conditions (a) TR and TC approach (b) MR and MC approach.

2. Theory of Income and Employment

Basic concepts and determination of Income and Employment

Aggregate demand and its components, propensity to consume and propensity to save (average and marginal), marginal efficiency of capital, equilibrium output; investment or output multiplier and the multiplier mechanism. Meaning of full employment and voluntary unemployment.

Problems of excess demand and deficient demand; measures to correct the, change in government spending and availability of credit.

3. Money and Banking

(i) Money: meaning, functions of money, supply of money.

Meaning, evolution of money, kinds of money, functions of money (primary, secondary and contingent) to be explained; supply of money – currency held by public and demand deposits held by commercial banks.

(ii) Banks: functions of commercial bank; reserve money, credit creation by commercial banks; Central Bank: need, functions.

Basic understanding of the functions of commercial banks, credit creation process. The regulatory role of the Central Bank, its functions and the way it controls the flow of credit needs to be explained. A brief mention may be made of CRR, SLR, Bank Rate policy and Open Market Operations.

(iii) Inflation: definition, types, causes: cost-push, demand-pull; effects of inflation on different groups of society; fiscal, monetary and other measures to control inflation.

Definition, types of inflation. The factors on the demand side – demand pull inflation and on the supply side – the cost push inflation, must be explained. The effects of inflation on salaried classes, borrowers, lenders, hoarding, inventory, etc. to be explained. A brief explanation of the measures to check inflation – fiscal, monetary and other measures.

4. National Income

(i) Circular flow of Income.

A simple model explaining the circular flow of income with two, three and four sector models with leakages and injections.

(ii) Nature of goods and services produced.

Economic and non economic goods, economic and non economic services, intermediate and final goods, consumer goods and producer goods, single-use and durable-use goods.

(iii) Concepts and definition of NY, GNP, GDP, NNP, private income, personal income, personal disposable income and per capita income; relationship between the income concepts.

A brief understanding of the mentioned national income aggregates is needed. The concepts of GNP and NNP should be explained both at factor cost and market prices, real GDP and nominal GDP, GDP and Welfare.

(iv) Methods of measuring National Income: product or value-added method; income method and expenditure method with simple numericals based on them.

Simple numericals based on all the methods to be covered for better understanding of the concept. Precautions and difficulties of measuring National Income for each method.

5. Public Finance

(i) Fiscal Policy: meaning, objectives and instruments of fiscal policy. An understanding of fiscal policy with respect to equity, stability and growth.

Meaning, objectives and instruments of fiscal policy (taxation, public debt, public expenditure). An understanding of fiscal policy with respect to equity, stability and growth.

(ii) Budget: meaning, importance and types. Government budget.

Meaning, importance and types of budget – union, state, planned, performance, supplementary, zero-base, vote on account, revenue, capital; concept of deficit, revenue deficit, fiscal deficit, primary deficit – their meaning and implications; surplus and balance budgets.
Click Here for ICSE Class XI and XII All Subjects Syllabus

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