CBSE Class 12 Economics Syllabus 2020-21
CBSE Class 12 Economics Syllabus 2020-21 comprises two significant parts, namely Microeconomics and Macroeconomics. The significant chapters that deal with Microeconomics are the introduction to Microeconomics, production and costs, the theory of consumer behaviour, market equilibrium, the theory of the firm under perfect competition, and non-competitive markets. The chapters that deal with the concepts of Macroeconomics include an introduction to Macroeconomics, national income accounting, money and banking, determination of income and employment, government budget and economy, and open economy macroeconomics.
Let’s have a look at the chapter-wise CBSE Class 12 syllabus 2020-21 for Microeconomics and Macroeconomics below-
CBSE Syllabus for Class 12 Economics 2020-21: Chapter-wise
CBSE Class 12 Economics Syllabus consists of 2 parts, namely Microeconomics (Part A) and Macroeconomics (Part B). Both parts comprise a total of 12 chapters. Below is a brief overview of all the chapters.
CBSE Class 12 Microeconomics Syllabus 2020-21
Chapter 1: Introduction to Microeconomics
Introduction to Microeconomics of Class 12 Economics introduces you to the concept of microeconomics. It teaches you about the simple economy, central problems of an economy such as what to produce, how to produce and for whom to produce. It also teaches you about the organisation of economic activities, centrally planned economy, the market economy, and positive and normative economics. It also briefs you about microeconomics and macroeconomics.
t teaches you terms like demand, supply, opportunity cost, consumer choice and welfare economics. It also helps you understand types of the simple economy such as manufacturing economy, agriculture economy and service economy.
Chapter 2: Theory of Consumer Behaviour
Theory of Consumer Behaviour of CBSE Class 12 Microeconomics Syllabus, explains about the utility, measures of utility namely total utility, marginal utility and ordinal utility analysis. It also educates you about the consumer’s budget, budget set, budget line, changes in the budget set, the optimal choice of the consumer, definition of demand, demand curve and the law of demand.
You will also be taught in detail about shifts in the demand curve, movements along the demand curve and shifts in the demand curve, market demand, elasticity of demand, factors determining price elasticity of demand for a good, elasticity and expenditure. It teaches you about deriving a demand curve from indifference curves. It also covers concepts such as budget constraints, normal goods, and inferior goods. Here, you will also learn about substitute goods and complementary goods.
Further, this chapter also covers features of the budget line – negative slope, straight line, real income line, tangent to indifference curve, the assumptions of the budget line: two commodities, income of the customers, market price and expense is similar to income. It also teaches you about the shift in budget line due to the change in price and shift due to change in income.
Chapter 3: Production and Costs
Production and Costs of CBSE Class 12 Economics Syllabus, introduces you to concepts such as the production function, the short run and the long run, total product, average product and marginal product, the law of diminishing marginal product and the law of variable proportions. It also explicitly discusses the shapes of total product, marginal product and average product curves and other concepts like returns to scale, costs, short-run costs and long-run costs.
Further, you will also learn about Legal Reserve Ratio (LRR), Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR), the repo rate, reverse repo rate, money creation or credit creations by commercial banks, general utility function, secondary functions of commercial banks and primary functions of commercial banks.
Chapter 4: The Theory of Firm Under Perfect Competition
The Theory of Firm Under Perfect Competition of Class 12 Economics, educate you of perfect competition and defining features. This chapter also covers revenue, profit maximisation, the profit maximisation problem, its graphical representation, the supply curve of a firm, the short-run supply curve of a firm, the long-run supply curve of a firm, the shutdown point, the normal profit and break-even point and determinants of a firm’s supply curve.
The chapter also explains you of the market supply curve, price elasticity of supply, short-run supply where the price is greater than or equal to the minimum AVC and price is less than the minimum AVC; long-run supply where price greater than or equal to the minimum LRAC and price less than the minimum LRAC.
Chapter 5: Market Equilibrium
Market Equilibrium of CBSE Class 12 Microeconomics Syllabus, explains about the equilibrium, excess demand, excess supply, market equilibrium: a fixed number of firms, market equilibrium: free entry and exit, reallocation of resources, management of public enterprises and generation of employment.
Further, you will also read about revenue receipt: tax and non-tax; capital receipts, revenue expenditure, capital expenditure, budget deficit and budgetary deficit, revenue deficit and its implications, fiscal deficit and its implications, primary deficit and its implications and measures to correct various deficits such as borrowing from the public, increasing govt revenue, lowering government expenditure, monetary expansion or deficit financing.
Chapter 6: Non-Competitive Markets
Non-Competitive Markets of Class 12 Economics introduces you to a simple monopoly in the commodity market, the market demand curve is the average revenue curve, marginal revenue and price elasticity of demand, short-run equilibrium of the monopoly firm, monopolistic competition and how do firms behave in Oligopoly. This chapter also talks about various features of the monopoly market.
The chapter also explains about types of commodity market such as the hard commodity market and soft commodity market. It also covers the simple case of zero cost, comparison of non-competitive markets with perfect competition, the balance of payment account, current account and capital account, systems of exchange rate such as fixed exchange rate and flexible exchange rate.
CBSE Class 12 Macroeconomics Syllabus 2020-21
Chapter 1: Introduction to Macroeconomics
Introduction to Macroeconomics of CBSE Class 12 Economics Syllabus, educate you about the emergence of macroeconomics, variables in macroeconomics such as cost prices, wage rates, rate of interest and profits. This chapter also discusses the structure of acroeconomy, circular flow of income, real or product or physical flow of income and money/ monetary/ nominal flow of income. This chapter also talks in detail about phases of the circular flow of income, namely the production phase, the distribution phase and the disposition phase.
Here, you will also learn about terms such as factor income, transfer income, stock, flow, economic territory or domestic territory, citizenship, normal resident, final goods, intermediate goods, some important points about final goods, and intermediate goods and important points on value.
It also tells you that final goods can be classified into two groups, namely consumption goods and capital goods. It also talks about various consumption goods like durable goods, semi-durable goods. It also covers the difference between final goods and intermediate goods along with relevant examples.
Chapter 2: National Income Accounting
National Income Accounting of CBSE Class 12 Macroeconomics, explains some basic concepts of macroeconomics. It talks about the two types of final goods, such as final consumer goods and final producer goods. It also discusses intermediate goods, various consumption goods, and capital goods
This chapter also explicitly explains terms like an investment, gross investment, net investment stock, and depreciation. The chapter also deals with significant concepts such as the circular flow of income and methods of calculating national income, such as the product or value-added method, expenditure method, and income method.
It tells you a lot about national income and domestic income. It also educates you about some macroeconomics identities, nominal and real GDP and GDP and welfare, NNP at factor cost, and NNP at market price. It also explains o you in details about private income, personal income, personal disposable income, national disposable income GNP deflator and Consumer Price Index(CPI)
This chapter also teaches you about the functions of national income accounting, uses of national income accounting, non-monetary exchange, and how the distribution of GDP and inflation may give a false impression.
Chapter 3: Money and Banking
Money and Banking of CBSE Class 12 Economics Syllabus, introduces you to functions of money, demand for money, the supply of money, money creation by the banking system, balance sheet of a fictional bank, limits to credit creation and money multiplier and policy tools to control the money supply.
Here, you will also come across functions of money such as primary function, secondary function and contingent function. Here you will also learn about the barter system, barter economy, and difficulties of the barter system. This chapter teaches you in detail about fiat money, fiduciary money, money supplier, and High Powered Money (HPM). It also throws light on banking types of banks such as commercial banks and central banks. It discusses in details the functions of commercial banks, factors affecting credit creation, and functions of the central bank.
This chapter further teaches you about the various instruments of Monetary Policy such as bank rate, quantitative instruments, open market operation, Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR), the repo rate, reverse repo rate, qualitative instruments, margin requirement, moral suasion, direct action, and rationing of credit. This chapter also covers concepts such as the supply of money, measures of money supply, and credit creation by commercial banks.
Chapter 4: Determination of Income and Employment
Determination of Income and Employment of CBSE Class 12 Macroeconomics Syllabus, educates you of aggregate demand and its components. The components of demand include Household Consumption Expenditure (C), Investment Expenditure (I), Government Consumption Expenditure (G), Net Export (X-M). It tells you that Aggregate Demand (AD)=C+I+G+ (X-M). This chapter also covers in details about Aggregate Supply and its components, namely Consumption (C), Savings (S). Hence Aggregate Supply (AS)=C+ S.
Here you will also learn about the consumption function, Average Propensity to Consume, Marginal Propensity to Consume, Linear Consumption Function, Saving Function, Average Propensity to Save, Marginal Propensity to Save, and Equilibrium Level of Output.
This chapter also teaches you about effective demand, autonomous investments, ex-ante investments, autonomous consumption, ex-ante savings, ex-ante investment, and ex-post saving and investment. Further, it teaches you about full employment equilibrium, underemployment equilibrium, the paradox of thrift, inflationary gap, multiplier mechanism, deflationary gap, fiscal policy, and monetary policy.
Chapter 5: Government Budget and Economy
Government Budget and Economy of CBSE Class 12 Economics explains about the government budget – meaning and its components, objectives of the government budget, classification of receipts into revenue receipts, and capital receipts, classification of expenditure into capital expenditure, revenue expenditure, plan expenditure, and non-plan expenditure. It also talks about a balanced budget, surplus budget, deficit budget, discretionary fiscal policy, reallocation of resources, management of public enterprises and generation of employment.
The chapter also focuses on revenue deficit and its implications, fiscal deficits and its implications, primary deficits and its implications, and measures to correct different deficits.
Chapter 6: Open Economy Macroeconomics
Open-Economy Macroeconomics of Class 12 Economics Syllabus, introduces you to the meaning and definition of an open economy. It teaches you about the balance of payments, current account, components of the current account, capital account components of the capital account. It also focuses on the balance of payments surplus and deficit, the foreign exchange market, foreign exchange rate, determination of the exchange rate, types of exchange rates namely fixed exchange rates and flexible exchange rates, and merits and demerits of flexible and fixed exchange rate systems.
It teaches you concepts such as autonomous transactions, accommodating items, managed floating, depreciation of the currency, appreciation of the currency, devaluation of the currency, and revaluation of the currency.