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Class 12 Economic



At senior secondary stage, the learners are in a position to understand abstract ideas, exercise the power of thinking and to develop their own perception. Therefore in CBSE Economics syllabus, the learners are exposed to the rigour of the discipline of economics in a systematic way.


It is imperative to provide an opportunity to students to acquire analytical skills to observe and understand the economic realities through their own experiences.


CBSE Economics Syllabus has been introduced in such a way that in the initial stage, the learners are introduced to the economic realities that the nation is facing today along with some basic statistical tools to understand these broader economic realities. In the later stage, the learners are introduced to economics as a theory of abstraction.

We would highly recommend reading the list of abbreviations that is frequently used in Economics, before starting your preparation. You can also download the list, for your own reference,with the download link given at the end of the page:

List of Abbreviations Used in Economics.


CBSE class 12 Economics Syllabus also contains many projects and activities. These provide opportunities for the learners to explore various economic issues both from their day-to-day life and also from issues, which are broader and invisible in nature.



  •    Of Understanding some basic economic concepts.
  •    Of Economic reasoning which the learners can apply in their day-to-day life as citizens, workers and consumers.
  •    Of understanding that there can be more than one view on any economic issue


  •    With necessary skills to argue logically with reasoning.
  •    With basic tools of economics and statistics to analyse economic issues.


  •    Their role in nation building and sensitivity to the economic issues that the nation is facing today.

Detailed Syllabus (Click on the link for Study Materials)

Unit 1: Introduction Economy-Meaning
Economics, Meaning, Types, Scope & Subject matter. Microeconomics and Macroeconomics.
Part A: Introductory Microeconomics Economic Problem – Meaning, Causes, Extent
Central problems of an economy What to Produce? How to Produce? For Whom to Produce? Causes of Central Problems
How Central Problems are solved in Socialist Economies/Capitalist Economies & Mixed Economies?
Production Possibility Curve (PPC or PPF) Concept of PPC
Concept of Opportuinty Cost and Marginal Opportunity Cost
General Shape of PPC with their Reasons, Shift of PPC, Movement along PPC,Movement towards the PPC, Rotation of PPC due to changes related to only one product
Effect of Different Natioanl Policies, International Events and Natural Conditions over PPC
Unit 2: Consumer’s Equilibrium and Demand
Utility Concept of Utility, Marginal Utility and Total Utility
Relationship between MU and TU
Law of Diminishing Marginal Utility using Utility Schedule and Utility Curve; Assumptions
Consumer’s Equilibrium – Utility Approach Meaning of Consumer’s Equilibrium , Assumptions of Law, Conditions of Equilibrium using Hypothetical Schedule or a diagram
Consumer’s Equilibrium – Indifference Curve Approach Concept of Budget Line & Budget Set
Concept & Features of Indifference Curve and Indifference Map, Concept of Monotonic Preferences and Convex Preferences
Conditions of Consumer’s Equilibrium using a diagram or a hypothetical schedule
Demand Concept of Desire, Want and Demand
Meaning of Individual Demand, Market Demand and Industry Demand
Determinants i.e. Factors Affecting Demand and Market Demand
Demand Schedule and Demand Curve
Law of Demand with the help of a hypothetical demand schedule and a demand curve
Concept of Movement along the demand curve and Shift in demand curve
Price Elasticity of Demand Concept of Price Elasticity of Demand
Degrees/Kinds/Types of Price Elasticity
Methods of Measurement of Price Elasticity of Demand – Proportionate Method.
Determinants i.e. Factors Affectig Price Elasticity of Demand
Unit 3 Producer Behaviour and Supply
Production Production function – Short-Run and Long-Run Concept of Production Short Run and Long Run Function, Meaning of Short Run and Long Run, Meaning of Fixed Factors and Variable Factors
Meaning & Relationship of Total Product, Average Product and Marginal Product.
Returns to a Factor Law of Variable Proportions – using hypothetical schedule
Law of Variable Proportions – using MP Curve or TP Curve or both
Relationship between MP & AP
Cost Meaning of Cost in Economics
Different Types of Costs Concept of FC, VC and TC
Revenue – total, average and marginal revenue – meaning and their relationships. Meaning and Relationship of ATC, AFC, AVC and MC using a hypothetical schedule
Relationship of different types of costs with the help of diagrams
Revenue Concept of Revenue Concept of TR, AR and MR
Relationship between AR & MR in different Markret forms and their General Relationship
Relationship between TR & MR in different Markret forms
Producer’s Equilibrium Producer’s equilibrium-meaning and its conditions in terms of marginal revenue-marginal cost. Producer’s Equilibrium in case of Perfect Competition – Using a hypothetical schedule & a diagram
Producer’s Equilibrium in case of Imperfect Competition – Using a hypothetical schedule & a diagram
Supply & Price Elassticity of Supply Supply Meaning of Supply & Market Supply
Determinants i.e. Factors Affecting Supply and Market Supply
Supply Schedule and Supply Curve
Law of Supply with the help of a hypothetical supply schedule and a supply curve
Concept of Movement along the supply curve and Shift in supply curve
Price Elasticity of Supply Concept of Price Elasticity of Supply
Degrees/Kinds/Types of Price Elasticity of Supply
Methods of Measurement of Price Elasticity of Supply – Proportionate Method.
Unit 4: Forms of Market and Price Determination under Perfect Competition with simple applications.
Perfect Competition Meaning & Features
Price Determination in Perfect Competition
Effect of Shift in Demand or Supply over Equilibrium Price
Effect of Simultaneous shift in both Demand & Supply Curve over Equilibrium Price
Effect of Various International changes, National or State Governent Policies or Natural Calamities over Equilibrium Price.
Monopoly Meaning & Features
Sources of Monopoly
Monopolistic Competition Meaning & Features
Features which are common with Monopoly and Perfect Competition
Oligopoly Meaning & Features
Simple Applications of Demand and Supply: Government Intervention – Price Ceiling, Price Floor.
Unit 5: National Income and Related Aggregates
Micro Economics and Macro Economics – Meaning, Scope, Interdependence and Difference
Basic Concepts Consumer Goods & Producer Goods
Final Goods and Intermediate Goods
Stock & Flow; CoE,
Depreciation and Capital Loss
Gross and Net
Market Price & Factor Cost
Circular Flow of Income-Concept
Concept of Domestic Income & National Income – Meaning & Difference
Relationship between various aggregates related of National Income GNP, NNP, GDP, NDP
Methods of calculating National Income – Steps, Precautions and Computation Value Added Method
Income Method
Expenditure Method
Real and Nominal GDP – Meaning and Computation
GDP and Welfare
Externalities – Positive & Negative
Unit 6: Money and Banking
Barter System Meaning of Barter
Drawback of Barter
Money Definition of Money
Money Supply – Narrow & Broader definition
Functions of Money (How Money helps in overcoming the drawbacks of barter?)
Money creation by the commercial banking system
Commercial Bank & Central Bank – Meaning & Difference
Credit Creation function of Commercial Banks
Functions of Central Bank Bankers’ Bank, Note issue, Banker to the Governent, Custodian of FERs, Credit Controlling
Quantitative Measure of Credit Control – Bank Rate, CRR, SLR, Repo & Reverse Repo Rate, Open Market Operations
Qualitative Measures of Creidit Control – Margin Requirement, Moral Suasion
Unit 7: Determination of Income and Employment
Aggregate Demand & Aggregate Supply – Meaning & Components Consumption Funtion, Autonomous Consumption, Propensity to Consume, APC, MPC
Saving Function, Propensity to Save, APS, MPS
Relationship between MPC and MPS , Relation between APC and APS
Induced Investments, Autonomous Investments
Derivation of Saving Curve from Consumption and Consumption Curve from Saving Curve
Investment Multiplier Meaning of Investment Multiplier
Working of Investment Multiplier
Relationship between Investment Multiplier and APC/MPC/APS/MPS
Equilibrium Level of Income/output Determination of Equilibrium Level of Income/Output using a hypothetical schedule (C-I Approach & S-I Approach)
Determination of Equilibrium Level of Income/Output using a diagram (C-I Approach & S-I Approach)
Determination of Equilibrium Level of Income/Output using and Algebraic Equation
Meaning of full employment and involuntary unemployment.
Under-employment Equilibrium
Inflationary Gap & Deflationarey Gap Meaning, Difference, Effects over Output, Employment, Income and Prices
Remedial Measures – Fiscal Policy Measures and Monetary Policy Measures
Effect of Government Policies or International Events over our National Income
Unit 8: Government Budget and the Economy
Government Budget – Meaning, Objectives and Components.
Classification of Receipts – Revenue Receipts and Capital Receipts Criteria to classify and examples
Classification of Expenditure – Revenue Expenditure and Capital Expenditure. Criteria to classify and examples
Measures of Budget – Meaning and Computation (Numerical) Balanced Budget; Unbalanced Budget; Surplus Budget; Deficit Budget; Revenue Budget; Fiscal Deficit; and Primary Deficit
Choice of Specific Type of Budget in case of Inflationary and Deflationary Gap situation
Unit 9: Balance of Payments
Balance of Payments Account – Meaning
Components of Balance of Payment Balance of Capital Account and Balance of Current Account
Autonomous and Accommodating Items
Balance of Current Account Balance of Current Account – Meaning & Components
Balance of Trade – Meaning & Components
Balance of Invisibles – Meaning & Components
Difference Balance of Payment and Balance of Trade
Balance of Capital Account Meaning & Components-Foreign Investments, Loans, Deposits by NRI
Foreign Investment – Foreign Direct Investments and Foreign Institutional Investment
Deficit in Balance of Payments – Meaning, Causes and Measures to Correct Deficit in BoP
Foreign Exchange Rate Meaning of Fixed and Flexible Rates and Managed Floating Exchange Rate
Foreign Exchange Market
Fixed and Floating Exchange Rate System Meaning and difference between Appreciation and Revaluation; Depreciation & Devaluation
Demand and Supply of Foreign Exchange Sources of Demand and Sources of Supply
Relationship between FER and Demand for FE and Supply of FE
Determination of exchange rate in a free market
Effect of Change in Foreign Exchange Rate over Imports/Exports/Demand or Supply of Foreign Exchange