| Micro IIntroduction and consumer behaviour | - Central problems: what, how and for whom to produce; production possibility frontier and opportunity cost
- Utility approach: total and marginal utility, diminishing marginal utility, equilibrium with one good (MU = price) and two goods (MUx/Px = MUy/Py)
- Budget set and budget line, indifference curves and the consumer's optimal choice
- Demand: determinants, law of demand, normal and inferior goods, substitutes and complements; movements versus shifts
- Price elasticity of demand: percentage method, total expenditure method, elasticity along a linear demand curve and its determinants
- Marginal utility
- Budget line
- Inferior good
- Unitary elastic
| Micro Ch 1–2 |
|---|
| Micro IIProduction and costs | - Production function; short run and long run; total, average and marginal product (MP = change in TP)
- Law of variable proportions and the shapes of TP, AP and MP; returns to scale
- Short-run costs: TFC, TVC, TC, AFC, AVC, AC and MC; U-shaped AC, AVC and MC, and MC cutting AVC and AC at their minimum
- Total, average and marginal revenue and their relationship
- Producer's equilibrium: MR = MC with MC rising at that output
- Marginal product
- Law of variable proportions
- Average fixed cost
- Producer's equilibrium
| Micro Ch 3 |
|---|
| Micro IIIPerfect competition | - Features: many buyers and sellers, homogeneous product, free entry and exit, perfect information; the firm as a price taker (P = AR = MR)
- Profit maximisation: P = MC, MC non-decreasing, and price at least equal to AVC in the short run (AC in the long run)
- Firm's supply curve, shut-down point and break-even point; normal profit
- Determinants of supply; movement along versus shift of the supply curve; market supply
- Price elasticity of supply and its geometric measurement
- Price taker
- Shut-down point
- Break-even point
- Elasticity of supply
| Micro Ch 4 |
|---|
| Micro IVMarket equilibrium | - Market equilibrium, excess demand and excess supply and how they push price towards equilibrium
- Solving linear demand and supply equations for equilibrium price and quantity
- Effects of shifts in demand and supply, and of simultaneous shifts
- Price ceiling (below equilibrium): shortage, rationing and black markets
- Price floor (above equilibrium), e.g. minimum support price: surplus and buffer stocks
- Excess demand
- Price ceiling
- Price floor
| Micro Ch 5 |
|---|
| Macro IIntroduction and national income | - Final and intermediate goods, stocks and flows, investment and depreciation; circular flow of income
- Value added (product), expenditure and income methods; avoiding double counting
- Factor cost, basic prices and market prices; net indirect taxes and net factor income from abroad
- Aggregates: GDP, GNP, NDP, NNP; NNP at factor cost as national income
- Nominal and real GDP, the GDP deflator, and GDP and welfare (distribution, non-monetary exchanges, externalities)
- Value added
- Net factor income from abroad
- GDP deflator
- Externalities
| Macro Ch 1–2 |
|---|
| Macro IIMoney and banking | - Functions of money: medium of exchange, unit of account, store of value; barter's double coincidence problem
- Supply of money: currency held by the public plus demand deposits; high-powered money
- Money creation by banks and the money multiplier (1 ÷ reserve ratio)
- RBI functions: currency issue, banker to the government, banker's bank, lender of last resort
- Policy tools: CRR, SLR, repo and reverse repo rates, bank rate and open market operations
- Money multiplier
- Repo rate
- Open market operations
- Lender of last resort
| Macro Ch 3 |
|---|
| Macro IIIIncome and employment | - Aggregate demand = consumption + investment; consumption function C = c̄ + bY, MPC and MPS (MPC + MPS = 1), APC and APS
- Equilibrium income where aggregate demand equals output (or saving equals investment)
- Effect of an autonomous change in aggregate demand; investment multiplier k = 1 ÷ (1 − MPC) = 1 ÷ MPS
- Excess demand (AD above full-employment output) and deficient demand (AD below it), and their effects on prices and employment
- Corrective measures through government spending, taxes and money supply
- MPC
- Investment multiplier
- Deficient demand
- Autonomous consumption
| Macro Ch 4 |
|---|
| Macro IVGovernment budget | - Objectives: reallocation of resources, redistribution of income, economic stability, managing public enterprises
- Revenue receipts (tax and non-tax) versus capital receipts (borrowings, recovery of loans, disinvestment)
- Revenue versus capital expenditure: whether it creates assets or reduces liabilities
- Balanced, surplus and deficit budgets
- Revenue deficit, fiscal deficit (total expenditure − revenue receipts − non-debt capital receipts) and primary deficit (fiscal deficit − interest payments)
- Capital receipt
- Fiscal deficit
- Primary deficit
| Macro Ch 5 |
|---|
| Macro VOpen economy | - Balance of payments: current account (trade in goods, invisibles, transfers) and capital account
- Autonomous and accommodating transactions; BoP surplus and deficit; official reserve transactions
- Foreign exchange rate; depreciation versus devaluation, appreciation versus revaluation
- Determination of a flexible exchange rate by demand for and supply of foreign exchange
- Fixed, flexible and managed floating regimes, with merits and demerits
- Current account
- Depreciation
- Managed floating
| Macro Ch 6 |
|---|
| Development IPolicies and experience, 1947–90 | - Colonial legacy: stagnant agriculture, de-industrialisation, export surplus drain, demographic and occupational structure
- Planning Commission (1950), Five Year Plans and their common goals: growth, modernisation, self-reliance, equity
- Agriculture: land reforms (abolition of intermediaries, land ceiling), Green Revolution with HYV seeds, subsidies debate
- Industry: role of the public sector, Industrial Policy Resolution 1956 (three categories), licensing, small-scale industry
- Trade policy of import substitution: tariffs and quotas
- Land ceiling
- Green Revolution
- IPR 1956
- Import substitution
| IED Ch 1–2 |
|---|
| Development IIReforms since 1991 | - The 1991 crisis: fiscal deficit, balance of payments crisis, falling foreign exchange reserves; IMF and World Bank loans
- Liberalisation: deregulation of industry, financial sector, tax, foreign exchange and trade and investment reforms
- Privatisation and disinvestment; Maharatna, Navratna and Miniratna status
- Globalisation: outsourcing and the World Trade Organisation (1995, successor to GATT)
- Appraisal: growth and services boom versus neglect of agriculture, uneven industrial growth and fiscal concerns
- Disinvestment
- Outsourcing
- Navratna
- WTO
| IED Ch 3 |
|---|
| Development IIICurrent challenges | - Human capital: sources (education, health, on-the-job training, migration, information), human capital versus human development, growth of education
- Rural development: rural credit, NABARD (1982), self-help groups, agricultural marketing and cooperatives
- Diversification into animal husbandry, fisheries and horticulture; organic farming
- Employment: worker-population ratio, self-employed, casual and regular workers, informalisation, unemployment types
- Environment: functions, absorptive capacity, pollution and degradation, strategies for sustainable development
- Human capital
- Self-help group
- Informalisation
- Sustainable development
| IED Ch 4–7 |
|---|
| Development IVNeighbour comparisons | - Development paths: China's Great Leap Forward (1958), Cultural Revolution and 1978 reforms; Pakistan's mixed economy and plans
- Demographic indicators: population growth, China's one-child norm, sex ratio and urbanisation
- GDP growth and sectoral composition of output and employment
- Human development indicators: HDI rank, life expectancy, literacy, poverty measures
- Appraisal of the strategies of the three countries
- Great Leap Forward
- One-child norm
- Human Development Index
| IED Ch 8 |
|---|
