General Economics For CA-CPT (Common Proficiency Test)

Cover
Contents
Preface
About the Authors
Chapter I: Introduction to Microeconomics
	Unit 1.1: Introduction to Microeconomics
		Introduction
		Definition of economics
		Methodology of studying economics
		Nature of economics
		Methods of study
		Central economic problems
		Different economies and their central economic problems
		Summary
		Multiple Choice Questions
		Explanations
Chapter II: Theory of Demand and Supply
	Unit 2.1: Law of Demand and Elasticity of Demand
		Meaning of demand
		Demand function
		Law of demand
		Demand schedule
		Rationale behind sloping of demand curve
		Exceptions to the law of demand
		Expansion and contraction in demand
		Increase and decrease in demand
		Distinction between movement along the demand curve and shift of the demand curve
		Elasticity of demand
		Price elasticity of demand
		Degrees of price elasticity of demand
		Methods of measuring price elasticity of demand
		Problem
		Determinants of price elasticity of demand
		Income elasticity of demand
		Cross elasticity of demand
		Demand classifications are as follows:
		Summary
		Multiple Choice Questions
		Answers
		Explanations
	Unit 2.2 Theory of Consumer Behaviour
		Introduction
		Characteristics of wants
		Utility
		Classification of utilities:
		Approaches to utility analysis
		Law of Diminishing Marginal Utility (LDMU)
		Consumer's equilibrium with one commodity
		The Law of Equi-Marginal utility (LEMU)
		Consumer Surplus
		Indifference Curve Analysis
		Features or properties of Indifference curve
		Price line or Budget line or Income line
		Forward and Backward shift in the Price Line
		Consumers Equilibrium
		Summary
		Multiple Choice Questions
		Answers
		Explanations
	Unit 2.3: Supply
		Introduction
		Factors influencing supply:
		Supply function
		Law of Supply
		Supply schedule (SS) and supply curve
		Individual supply schedule
		Individual supply curve
		Market supply schedule and curve
		Expansion or contraction in quantity supplied (movements along the supply curve)
		Increase and decrease in supply
		Differences between movement along the supply curve and shift of the supply curve
		Elasticity of supply
		Types of supply Elasticity
		Measurement of elasticity of supply
		Equilibrium price:
		Summary
		Multiple Choice Questions
		Answers
		Explanations
Chapter III: Theory of Production and Cost
	Unit 3.1: Theory of Production
		Meaning of production
		Factors of production
		Land
		Labour
		Capital
		Types of capital:
		Entrepreneur or enterprise
		Production function
		Cobb-Douglas production function
		Assumptions of production function
		Short run stages of the law of variable proportions
		Stage of operation
		Long run production function – Law of returns to scale
		Differences between law of variable portions and returns to scale
		Production function with two factor input or production function with ISO-Quants & ISO-Costs.
		Features or properties of ISO-Quant Curves
		ISO-Cost Curves
		Producer's equilibrium
		Economies and diseconomies of scale
		Example of diseconomies of scale
		Summary
		Multiple Choice Questions
		Answers
		Explanations
	Unit 3.2: Theory of Cost
		Meaning of cost
		Meaning of cost analysis
		Cost function
		Cost concepts
		Short run costs
		Relationship between AC and MC
		Long run average cost curve (LAC curve)
		Summary
		Basics
		Answers
		Explanations
Chapter IV: Price Determination in Different Markets
	Unit 4.1: Price Determination in Different Markets
		Meaning of market:
		Types of markets
		Concepts of total revenue, average revenue and marginal revenue
		Meaning of revenue
		Relationship between Total Revenue, Average Revenue and Marginal Revenue
		Behavioural principles
		Summary
		Multiple Choice Questions
		Answers
		Explanations
	Unit 4.2: Determination of Prices
		Introduction
		Meaning of equilibrium
		Meaning of equilibrium price
		Determination of equilibrium price
		Changes in demand and supply
		Simultaneous changes in demand and supply
		If demand and supply increase in the same proportion
		Summary
		Multiple Choice Questions
		Answsers
		Explanations
	Unit 4.3: Price-output Determination Under Different Market Forms
		Perfect competition Market
		Price and output determination under perfect competition
		Determination of price:
		Supply curve- perfectly competitive market
		Short run equilibrium of the firm
		Long run equilibrium of the firm
		Long run equilibrium
		Monopoly
		Features of the monopoly market
		The difference between the monopoly and perfect competition
		Monopoly power:
		Types of monopoly
		Monopolist's Revenue Curves
		Equilibrium of monopoly firm
		Short run equilibrium
		Long run equilibrium
		Discriminating monopoly
		Price-output determination under price discrimination
		Objectives of price discrimination
		Monopolistic competition
		The features of monopolistic competition:
		Price-output determination in monopolistic competition
		Short term equilibrium
		Long run equilibrium of the firm under monopolistic competition
		Oligopoly
		Types of oligopoly
		Characteristics of oligopoly
		Price and output decisions in an oligopolistic market
		Summary
		Multiple Choice Questions
		Answers
		Explanations
Chapter V: Indian Economy-a Profile
	Unit 5.1 Nature of Indian Economy
		Undeveloped economy
		India as an undeveloped economy
		India- as a developing economy
		India – as a mixed economy
		Summary
		Multiple Choice Questions
		Answers
		Explanations
	Unit 5.2 Role of Different Sectors in India
		Agriculture
		Industry
		Service
		Summary
		Multiple Choice Questions
		Answers
		Explanations
	Unit 5.3 National Income in India
		Introduction
		Basic concepts in national income and output
		Methods of estimating national income
		Income method
		Value added method or product method or output method
		Expenditure method
		Problems in estimating the national income
		Trends in India's national income growth and structure
		Summary
		Multiple Choice Questions
		Answers
		Explanations
	Unit 5.4: Basic Understanding of Tax System in India
		Introduction
		Direct taxes
		Indirect taxes
		Difference between direct and indirect taxes
		Principles of a good tax system
		Tax structure in India
		Direct tax
		Indirect taxes
		VAT
		Service tax
		Features of tax structure in India
		Evaluation of the Indian tax system
		Summary
		Multiple Choice Questions
		Answers
		Explanations
Chapter VI: Select Aspects of Indian Economy
	Unit 6.1: Population
		Introduction
		Meaning of population
		Demographic trends in India
		Causes of rapid growth of population
		Theory of Demographic Transition:
		Effects of increase in population on economic growth of India
		Government measures for solving the problem of population
		Features of National Population Policy
		Summary
		Multiple Choice Questions
		Answers
		Explanations
	Unit 6.2 Poverty
		Introduction
		Types of poverty
		Poverty in India
		Causes of poverty
		Government programmes for poverty alleviation
		Summary
		Multiple Choice Questions
		Answers
		Explanations
	Unit 6.3: Unemployment
		Introduction
		Meaning and types of unemployment
		Nature of unemployment in India
		Various causes of unemployment in India
		Extent of unemployment in India
		Some important terms
		Measurement of unemployment
		Demographic dividend
		Summary
		Multiple Choice Questions
		Answers
		Explanations
	Unit 6.4: Infrastructural Challenges
		Infrastructure
		Energy
		Difficulties and problems relating to energy
		Recent steps taken to meet the above problems
		Transportation
		Railways
		Problems faced by Indian Railways
		Road
		Problems of road transport
		Water transport
		Reasons for the slow growth of coastal shipping
		Problems faced by Indian ports
		Air transport
		Communication
		Health
		Education
		Summary
		Multiple Choice Questions
		Answers
		Explanations
	Unit 6.5 Inflation
		Meaning of inflation
		Types of inflation
		Stagflation
		Galloping inflation
		Deflation
		Price trends in India
		Main causes of inflation in India
		Measures to check inflation
		Summary
		Multiple Choice Questions
		Answers
		Explanations
	Unit 6.6: Budget and Fiscal Deficits in India
		Meaning of budget
		Types of deficits
		Trends in India's budget and fiscal deficits
		Summary
		Multiple Choice Questions
		Answers
		Explanations
	Unit 6.7: Balance of Payments
		Introduction
		Balance of Trade (BOT)
		Balance of Payment (BOP)
		Components of balance of payment
		Differences between BOP and BOT
		Trends in Balance of Payments in India
		Summary
		Multiple Choice Questions
		Answers
		Explanations
	Unit 6.8: External Debt
		External debts in India
		Types of external debts in India
		Trend of external assistance in India
		Summary
		Multiple Choice Questions
		Answers
		Explanations
Chapter VII: Economic Reforms in India
	Unit 7.1 Economic Reforms in India
		Introduction
		Reforms in the industrial sector:
		Reforms in the financial sector
		Reforms in the external sector
		Reforms in the fiscal policy
		Impact of economic reforms on the Indian economy
		Other measures taken by the government
		Summary
		Multiple Choice Questions
		Answers
		Explanations
	Unit 7.2: Liberalization, Privatization and Disinvestment
		Introduction
		Liberalisation
		Privatisation
		Disinvestment
		Summary
		Multiple Choice Questions
		Answers
		Explanations
	Unit 7.3: Globalization
		Meaning of globalisation
		Merits of globalisation
		Demerits of globalisation
		Measures of India towards globalisation
		Effect of globalisation on Indian economy
		Main organisations for facilitating globalisation
		Summary
		Multiple Choice Questions
		Answers
		Explanations
Chapter VIII: Money and Banking
	Unit 8.1 Money
		Introduction
		Defnition of money
		Types of money
		Functions of money
		Money stock in India
		Time deposit
		Demand deposit
		Term deposit
		Summary
		Multiple Choice Questions
		Answers
		Explanations
	Unit 8.2: Commercial Banks
		Meaning of a Bank
		Meaning of banking
		Role of commercial banks
		Functions of a bank
		Commercial banking in India
		Nationalisation of commercial banks
		Objectives of nationalisation
		Progress of commercial banks after nationalisation
		Shortcomings of commercial banking in India
		Measures taken to reduce NPAs
		Summary
		Multiple Choice Questions
		Answers
		Explanations
	Unit 8.3: The Reserve Bank of India (RBI)
		Meaning of a central bank
		Functions of a central bank
		Objective of a central bank
		Role of the Reserve Bank of India (RBI)
		Functions of the Reserve Bank of India (RBI)
		Indian monetary policy
		Summary
		Multiple Choice Questions
		Answers
		Explanations