ISC Class 12 Economics Syllabus

Introduction to ISC Class 12 Economics Syllabus

Economics has become one of the most popular fields worldwide in the coming years due to the rise in the stock market and people’s interest in it. Economics is a study of social science. It is to understand different aspects of production/distribution of goods, products supply, and demand.

ISC Class 12 Economics Syllabus: Semester 1 & 2

Semester 1


Semester 1


Unit No. Name of the Unit Unit No. Name of the Unit
1. Micro Economic Theory 2. Theory of Income and Employment
3. Money and Banking
4. Balance of Payment and Exchange Rate
5. Public Finance
6. National Income

A brief introduction to ISC Class 12 Economics Syllabus Semester 1 & 2

Micro Economic Theory:

  • Demand: Incorporate the determinants of demand. Diagrams to explain the law of demand, reasons for the demand curve’s downward slope, and its derivation using the demand schedule. 
  • The elasticity of demand: It has various point methods, percentage methods, expenditure methods, and geometric methods. The degree of elasticity of demand is to be explained by using diagrams wherever necessary.
  • Supply: Law, schedule, and curve supply method. It gathers information on the market supply curve from the individual supply curve and its movement/shift.
  • Market Mechanism: Understanding the concept of equilibrium. Effects of changes in demand and supply along the curves and shift of the curves explained. Fundamental understanding of control in price and rationing. Price ceiling along with floor price helps in demand and supply curves.
  • Concept of production and its function (short & long run functions).
  • Cost and revenue: Fundamental concepts of cost; fixed cost, variable cost, total cost, marginal cost, and average cost.
  • Primary market forms: perfect and monopolistic competition. 

Theory of Income and Employment

  • Fundamental concepts/ determination of Income and Employment.

Money and Banking

  • Money: Its meaning, functions, and supply.
  • Banks: Functions of the commercial bank; credit creation by commercial banks; Central Bank: operations.

Balance of Payment and Exchange Rate

  • Balance of Payment – Its meaning, components, foreign exchange, and exchange rate determination (Flexible).

Public Finance

  • FISCal Policy: It’s the meaning and instruments of fISCal policy.
  • Government Budget: Meaning, types, and components.

National Income

  • Circular flow of Income.
  • Concepts and definition of GDP, NNP, private Income, Personal Income, personal disposable Income, national disposable Income, and per capita Income; the relationship between different income concepts, etc
  • Methods of measuring National Income: Product or value-added method; income method, and expenditure method.

ISC Class 12 Economics Syllabus: Examination Pattern and Chapter Weightage 

The Examination pattern has been divided into two parts:

  • Examination Paper I -Theory will be of  3 hours and worth 80 marks.
  • Examination Paper-II- Project Work will consist of 20 marks.

Examination Paper Pattern for Paper-I Theory:

Part-I shall consist of 20 marks, mandatory short answer questions, testing knowledge, application, and skills relating to elementary/fundamental aspects of the entire Syllabus.

Part-II shall consist of 60 marks with eight questions, out of which students will be required to answer five questions, carrying 12 marks each. 

Examination Paper Pattern for Paper-II Project work:

Students are expected to have completed two projects from any topic covered in Theory. 

ISC Economics Class 12 Syllabus

Part 1 (20 marks) consists of compulsory short answer questions testing knowledge, application and skills relating to elementary / fundamental aspects of the entire syllabus.

Part II (60 marks) consists of eight questions out of which candidates will be required to answer five questions, each carrying 12 marks.

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, consumer’s equilibrium through utility approach (Cardinal) and indifference curve analysis (Ordinal).

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

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

(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.

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

(vi) 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. Revenue: meaning; average revenue, marginal revenue and total revenue and their relationships under perfect competition and imperfect competition, Producer’s equilibrium.

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

2. Theory of Income and Employment

Basic concepts and determination of Income and Employment

The concept of demand (exante) and effective (expost) demand. Aggregate demand and its components, propensity to consume and propensity to save (average and marginal), equilibrium output (aggregate demand and aggregate supply approach; and saving and investment approach); investment multiplier (its meaning and mechanism with the help of a diagram). Simple numerical based on the above.

Meaning of full employment. Problems of excess demand and deficient demand; measures to correct them.

3. Money and Banking

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

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

4. Balance of Payment and Exchange Rate

Balance of Payment – meaning, components; foreign exchange – meaning, determination of exchange rate (Flexible).

Balance of Payment – Meaning and components; Causes of disequilibrium and how the disequilibrium can be corrected; Foreign Exchange Rate – meaning, meaning of fixed and flexible exchange rate, determination of exchange rate in a free market. Concepts of depreciation, appreciation, devaluation and revaluation (meaning only).

5. Public Finance

(i) Fiscal Policy: meaning and instruments of fiscal policy.

Meaning and instruments of fiscal policy – Public Revenue: Meaning, taxes (Meaning and types), difference between direct and indirect taxes; Public Expenditure: Meaning and importance; Public Debt: Meaning and redemption; Deficit Financing: meaning.

(ii) Government Budget: meaning, types and components.

Meaning and types of Government budget – union, state; components – revenue and capital. Concept of deficit budget: revenue deficit, fiscal deficit, primary deficit – their meaning and implications.

6. 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) Concepts and definition of NY, GNP, GDP, NNP, private income, personal income, personal disposable income, National Disposable Income and per capita income; relationship between the income concepts.

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

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FAQs (Frequently Asked Questions)

1. What are the two categories of Economics?

Modern Economics is broken into two distinct types:

  • The study of Economics that focuses on understanding an individual’s behaviour and consumption on an individual level is called microeconomics. It scrutinises the changes on a household or personal level and their impact on economic prosperity. Consumer behaviour is believed to be the most important in microeconomics. It is considered an important area of study and research to tackle the world problems of poverty and unemployment.
  • The study of Economics that focuses on understanding the behaviour and performance of an economy as a whole is called macroeconomics. 

2. Explain the important types of Economic Systems covered in the Economics Syllabus Class 12 ISC?

Economic System refers to a country that conducts trade and business on a national and international level. Economics System has four important types:

  • Traditional System: It is the most basic form where goods are sold and purchased on the barter system.
  • Capitalism: It is characterised by an absence of governmental interference and regulation.
  • Socialism: It is the exact opposite of Capitalism. It has governmental intervention in public enterprises and evaluation of prices. 
  • Mixed Economy: Mixed Economy refers to a system amalgamation of Capitalism and Socialism. It is characterised by the existence of both private and public enterprise, minimal government intervention, and both the government and private sector influence supply and demand policies.