ECONOMICS

UPSC CSE Mains Economics Syllabus

(These syllabus may change from time to time. Please check with the relevant Public Service Commission websites for any changes in the syllabus)

Paper - I

1. Advanced Micro Economics:
(a) Marshallian and Walrasiam Approaches to Price determination.
(b) Alternative Distribution Theories: Ricardo, Kaldor, Kaleeki
(c) Markets Structure: Monopolistic Competition, Duopoly, Oligopoly.
(d) Modern Welfare Criteria: Pareto Hicks & Scitovsky, Arrow’s Impossibility Theorem, A.K. Sen’s Social Welfare Function.
2. Advanced Macro Economics: Approaches to Employment Income and Interest Rate determination: Classical, Keynes (IS-LM) curve, Neo classical synthesis and New classical, Theories of Interest Rate determination and Interest Rate Structure.
3. Money - Banking and Finance:
(a) Demand for and Supply of Money: Money Multiplier Quantity Theory of Money (Fisher, Pique and Friedman) and Keyne’s Theory on Demand for Money, Goals and Instruments of Monetary Management in Closed and Open Economies. Relation between the Central Bank and the Treasury. Proposal for ceiling on growth rate of money.
(b) Public Finance and its Role in Market Economy: In stabilization of supply, allocation of resources and in distribution and development. Sources of Govt. revenue, forms of Taxes and Subsidies, their incidence and effects. Limits to taxation, loans, crowding-out effects and limits to borrowings. Public Expenditure and its effects.
4. International Economics:
(a) Old and New Theories of International Trade

(i) Comparative Advantage
(ii) Terms of Trade and Offer Curve.
(iii) Product Cycle and Strategic Trade Theories.
(iv) Trade as an engine of growth and theories of under development in an open economy.

(b) Forms of Protection: Tariff and quota.
(c) Balance of Payments Adjustments: Alternative Approaches.

(i) Price versus income, income adjustments under fixed exchange rates,
(ii) Theories of Policy Mix
(iii) Exchange rate adjustments under capital mobility
(iv) Floating Rates and their Implicationns for Developing Countries: Currency Boards.
(v) Trade Policy and Developing Countries.
(vi) BOP, adjustments and Policy Coordination in open economy macro-model.
(vii) Speculative attacks
(viii) Trade Blocks and Monetary Unions.
(ix) WTO: TRIMS, TRIPS, Domestic Measures, Different Rounds of WTO talks.

5. Growth and Development:
(a) Theories of growth:

(i) Harrod’s model,
(ii) Lewis model of development with surplus labour
(iii) Balanced and Unbalanced growth,
(iv) Human Capital and Economic Growth.
(v) Research and Development and Economic Growth

(b) Process of Economic Development of Less developed countries: Myrdal and Kuzments on economic development and structural change: Role of Agriculture in Economic Development of less developed countries.
(c) Economic development and International Trade and Investment, Role of Multinationals.
(d) Planning and Economic Development: changing role of Markets and Planning, Private- Public Partnership
(e) Welfare indicators and measures of growth – Human Development Indices. The basic needs approach.
(f) Development and Environmental Sustainability – Renewable and Non Renewable Resources, Environmental Degradation, Intergenerational equity development.

Paper - II

1. Indian Economy in Pre-Independence Era: Land System and its changes, Commercialization of agriculture, Drain theory, Laissez faire theory and critique. Manufacture and Transport: Jute, Cotton, Railways, Money and Credit.
2. Indian Economy after Independence:
A The Pre Liberalization Era:

(i) Contribution of Vakil, Gadgil and V.K.R.V. Rao.
(ii) Agriculture: Land Reforms and land tenure system, Green Revolution and capital formation in agriculture,
(iii) Industry Trends in composition and growth, Role of public and private sector, Small scale and cottage industries.
(iv) National and Per capita income: patterns, trends, aggregate and Sectoral composition and changes their in.
(v) Broad factors determining National Income and distribution, Measures of poverty, Trends in poverty and inequality.

B The Post Liberalization Era:

(i) New Economic Reform and Agriculture: Agriculture and WTO, Food processing, Subsidies, Agricultural prices and public distribution system, Impact of public expenditure on agricultural growth.
(ii) New Economic Policy and Industry: Strategy of industrialization, Privatization, Disinvestments, Role of foreign direct investment and multinationals.
(iii) New Economic Policy and Trade: Intellectual property rights: Implications of TRIPS, TRIMS, GATS and new EXIM policy.
(iv) New Exchange Rate Regime: Partial and full convertibility, Capital account convertibility.
(v) New Economic Policy and Public Finance: Fiscal Responsibility Act, Twelfth Finance Commission and Fiscal Federalism and Fiscal Consolidation.
(vi) New Economic Policy and Monetary system. Role of RBI under the new regime.
(vii) Planning: From central Planning to indicative planning, Relation between planning and markets for growth and decentralized planning: 73rd and 74th Constitutional amendments.
(viii) New Economic Policy and Employment: Employment and poverty, Rural wages, Employment Generation, Poverty alleviation schemes, New Rural, Employment Guarantee Scheme.

ECONOMICS- MCQs

1. A market with few producers in the Industry
(A) Oligopoly (B) Monopsony         (C) Duopoly (D) Cartel
Ans: A

2. In case of deficit budget, when the deficits are covered through taxes, that budget is called :
(A) surplus budget (B) balanced budget     (C) unbalanced budget    (D) none of these
Ans: B

3. The WTO was founded in
(A) 1995 (B) 1998   (C) 2000 (D) 1996
Ans: A

4. Privatisation of the public sector enterprises by selling off part of the equity of PSEs to the public is known as
(A) disinvestment (B) equity share   (C) profit (D) dividend
Ans: A

5. Which have been removed to increase the competitive position of Indian goods in the international markets ?
(A) Import duties (B) Export duties   (C) Tariffs    (D) Quota
Ans: B

6. Which is the term used to refer the relationship between human beings and their physical environment ?
(A) Human physiology (B) Human ecology     (C) Human environment (D) None of these
Ans: A

7. The standard of living is often measured by
(A) Real GDP per capita (B) Real GDP   (C) Real GDP population (D) Real GDP plus depreciation
Ans: A

8. The Gini Coefficient measures
(A) Income inequality (B) Inflation      (C) Unemployment (D) Economic growth
Ans: A

9. The year in which Burgress and Park developed their theory of urban ecology
(A) 1925    (B) 1935   (C) 1915 (D) none of these
Ans: A

10. Which of the following is a stage within the 'product life cycle' ?
(A) Maturity (B) Profitability   (C) Abandonment (D) Regeneration
Ans: A

11. An organisation's equal opportunities policy should be concerned with which of the following ?
(A) Age discrimination (B) Opportunity cost   (C) Globalisation of supply (D) the balanced scorecard
Ans: A

12. Which of the following describes an economic market that is controlled by two main suppliers ?
(A) Monopoly (B) Price discrimination   (C) Duopoly (D) Perfect competition
Ans: C

13. Which of the following explains how a Public sector organization obtains its Funds ?   (A) from direct and indirect taxes
(B) from money invested by shareholders
(C) from donations made by the public
(D) from sales in overseas markets
Ans: A

14. 'Dynamic inefficiency' in the context of a model of economic growth means
(A) the economy's output per unit labour is below its steady-state value
(B) the economy's unemployment rate is too high
(C) the economy's steady state is not at the golden-rule steady-state
(D) none of the answers are correct
Ans: A

15. 'Capital Widening' refers to that part of investment needed to
(A) increase the capital per unit effective labour ratio
(B) replace capital that has depreciate
(C) equip new units of effective workers at the same capital per unit effective labour ratio
(D) all of the above
Ans: D

16. A 'PEST' analysis is conducted on which of the following of an organisation's environments ?
(A) Internal environment (B) Market environment   (C) Historical environment (D) Macro environment
Ans: D

17. The movement of people from central cities to smaller communities in the surrounding areas is known as
(A) Reverse migration (B) Under urbanization    (C) Suburbanisation (D) Over-urbanisation
Ans: C

18. The gendering of World Politics is seen in which areas ?
(A) Prostitution and human trafficking    (B) Civil wars and refugee flows   (C) Trade and development   (D) All the options given above are correct
Ans: D

19. The period of the business cycle in which real GDP is increasing is called the :
(A) expansion (B) peak   (C) recession (D) depression
Ans: A

20. A type of unemployment in which workers are in between jobs or are searching for new and better jobs is called
(A) Frictional unemployment (B) Cyclical unemployment     (C) Structural unemployment (D) Turnover
Ans: A

21. Which of the following is a "loser" from unexpected inflation ?
(A) Workers with COLAs     (B) people who own treasury Bills    (C) the middle class    (D) people who own homes and have fixed rate martgages
Ans: B

22. The largest transfer in the federal budget is :
(A) defense (B) education   (C) Social security       (D) Welfare
Ans: C

23. The Philips curve describes the relationship between :
(A) the federal budget deficit and the trade deficit
(B) savings and investment
(C) the unemployment rate and the inflation rate
(D) marginal taxes rates and tax revenues
Ans: C

24. According to the monetarists, in the long-run, the Phillips curve is
(A) vertical (B) horizontal   (C) downward sloping (D) upward-sloping
Ans: B

25. Who has given the concept of urban fringe ?
(A) M.N. Srinivas (B) K.M. Kapadia   (C) S.C. Dube (D) None of these
Ans: A

26. Who introduced the concept of Gesellschalt ?
(A) George Simmel (B) Durkheim   (C) Tonnies (D) None of these
Ans: C

27. What is "double burden" ?
(A) It refers to the disproportionate share of housework done by women
(B) It dates to the 17th century
(C) It is rooted in gendered conceptions of the distinction between public and private life   (D) All of the options given above are correct
Ans: D

28. What is the gendered division of labour ?
(A) It is based on gender-structured conceptions of appropriate work
(B) It has led to an increase in women's consumption worldwide.
(C) It negates the 'double burden'
(D) none of the answers given are correct
Ans: A

29. What is the impact of globalization ?
(A) It has created new areas of women's advancement
(B) It has led to new challenges and dangers for women
(C) It has not changed the fundamental inequality of gender-relationships in the world enough
(D) all of the options given above are correct
Ans: D

30. Who developed concentric-zone theory of city ?
(A) Louis Wirth (B) E. Burgess   (C) M.N. Srinivas (D) M.S.A. Rao
Ans: B

31. Who among the following economists emphasized the role of non-economic factors in explaining growth ?
(A) R.M. Solow (B) Dusenberry   (C) N. Kaldor (D) Harrod
Ans: C

32. For a linear demand curve, which of the following is true ?
(A) Elasticity of demand is unity at all points.
(B) Elasticity of demand is constant at all points.
(C) Elasticity increases as one slides down the demand curve.
(D) Elasticity declines as one slides down the demand curve.
Ans: D

33. Hedging in the foreign exchange market refers to :
(A) An act of devaluation
(B) Not covering a risk of foreign exchange in future
(C) Covering a risk of foreign exchange in future
(D) None of the above
Ans: C

34. New Trade Policy 2015-20 has introduced a new scheme which is called
(A) Merchandise Export from India Scheme
(B) Export from India Scheme
(C) Merchandise Trade from India Scheme
(D) Trade from India Scheme
Ans: A

35. Inclusive growth objective was given for the first time in which Plan of India ?
(A) 9th Five Year Plan (B) 10th Five Year Plan
(C) 11th Five Year Plan (D) 12th Five Year Plan
Ans: C

36. Type-I error is defined as :
(A) Reject Null-hypothesis when it is false
(B) Reject Null-hypothesis when it is true
(C) Accept Null-hypothesis when it is true
(D) Accept Null-hypothesis when it is false
Ans: A

37. Labour market reforms aim at :
(A) Job security    (B) Minimum wage      (C) Labour market flexibility   (D) Employment insurance
Ans: C

38. Which of the following is credited with introduction of LPG model of economic development in India
(A) Dr. C Rangarajan (B) Dr. Montek Singh Ahluwalia   (C) Dr. Amartya Sen (D) Dr. Manmohan Singh
Ans: D

39. Philips curve sets up a relation between
(A) Taxes and inflation      (B) Inflation and unemployment    (C) Money Supply and aggregate demand        (D) Price and cost of production
Ans: B

41. The relationship between aggregate saving and income is known as
(A) Saving function      (B) Demand Function        (C) Supply function (D) Consumption function
Ans: A

42. The properties of General Equilibrium state are called
(A) Efficiency    (B) Pareto efficiency   (C) Property efficiency (D) Accuracy
Ans: B

43. The negative of the slope of the PPC is called
(A) MRPT (B) MRPS   (C) Negative productivity (D) disinvestment
Ans: A

44. The new share price Index of Mumbai Share Market is
(A) DOLEX (B) UREX   (C) FOREX (D) SENSEX
Ans: C

45. Who developed Kinked Demand Curve Model ?
(A) Samuelson   (B) Paul Sweezy   (C) Mahalanobis (D) Marshall
Ans: B

46. A market in which there is only one seller and only one buyer is called
(A) Duopoly (B) bilateral monopoly   (C) monopsony (D) oligopoly
Ans: B

47. A producer cannot cross the iso-cost line because of
(A) fixed outlay (B) entire outlay   (C) price (D) none of the above
Ans: A

48. Who is the founder of behaviouralistic theories ?
(A) Bain (B) Cyert and March      (C) Modigliani (D) Karl Marx
Ans: B

49. Gilt edged market means
(A) bullion market (B) market of government securities   (C) market of guns (D) market of pure metals
Ans: B

50. A mathematical expression showing the relationship between volume of output and its total cost of production is called
(A) cost-function (B) price-function   (C) demand function (D) supply function
Ans: A

51. In the Keynesian Model of aggregate expenditure, real GDP is determined by the
(A) Level of taxes (B) Level of aggregate demand    (C) Price level (D) Level of aggregate supply
Ans: B

52. An increase in expected future income
(A) shifts the saving function upward    (B) decreases consumption expenditure   (C) increases saving    (D) shifts the consumption function upward
Ans: D

53. If the marginal propensity to save is 0.6, then the Marginal Propensity to consume Is   (A) 1.0 (B) 0.4   (C) 0.6 (D) not determinable
Ans: B

54. When the consumption function becomes steeper,
(A) the saving function also become steeper   (B) the MPC falls    (C) the MPC rises       (D) loss of every dollar is consumed
Ans: C

55. The only way to increase the output of one good is to reduce the output of another. This allocation of inputs is said to be :
(A) Consumption efficient (B) Production efficient     (C) Economic efficient (D) None of the above
Ans: A

56. A good for which consumption falls as an individual's income rises
(A) inferior good (B) consumption good   (C) durable good (D) non-durable good
Ans: A

57. The increase in consumption brought about by a increase in income, when the prices of goods are held constant
(A) substitution effect (B) income effect    (C) price effect   (D) none of the above
Ans: B

58. A curve that describes the relationship between the quantity of a good consumed and income
(A) Kinked curve    (B) Engel curve       (C) Demand curve (D) None of the above
Ans: B

59. A form of implicit collusion, where one firm in the market sets the price and other firms follow suit
(A) cartel (B) giffen good   (C) price leadership (D) price taker
Ans: C

60. A form of intertemporal price discrimination in which peak users pay more than off-peak users because marginal cost is higher during peak periods
(A) Peak-load pricing (B) peak-load effect   (C) peak-load consumption (D) none of the above
Ans: A

61. Segmented labour markets imply :
(A) labour discrimination
(B) Labour paid wage less than MRP
(C) MP theory of wage fails to determine market outcomes
(D) Equality of wages of different types of labour Which of the above is incorrect ?
Ans: D

62. In India those farmers are called 'Marginal Farmers' who hold land upto :
(A) 1 hectare     (B) 2 hectares      (C) 3 hectares (D) 4 hectares
Ans: A

63. Which of the following is not related to 'empowerment of women' ?
(A) Gender Development Index (B) Gender Empowerment Measure    (C) Gender Budgeting (D) Gender discrimination
Ans: D

64. The agricultural census is done at which one of the following intervals ?
(A) once in five years    (B) every year   (C) once in ten years    (D) twice
Ans: A

65. The maximum amount that a customer is willing to pay for a good
(A) real price (B) reservation price      (C) marginal price (D) absolute price
Ans: B

66. Tobin tax is a tax on :
(A) transactions in the share market    (B) transactions in the money market   (C) transactions in the commodity market   (D) transactions in the foreign exchange market
Ans: D

67. The discriminating monopolist will charge a higher price in the market in which the price elasticity of :
(A) demand is smaller (B) supply is smaller   (C) demand is greater (D) supply is greater
Ans: A

68. A model of oligopoly in which one firm sets output before the other firms do
(A) strategic model (B) stackelberg model   (C) suspense model   (D) duopoly
Ans: B

69. An expenditure that has already been made and cannot be recovered
(A) fixed cost (B) sunk cost       (C) variable cost (D) real cost
Ans: B

70. Dividing consumers into two or more groups with different demands for a product in order to charge different prices to each group
(A) first degree price discrimination    (B) second degree price discrimination    (C) third degree price discrimination    (D) none of the above
Ans: C

Recommended Books

Indian Economy: Performance and Policies: 2015 - 16 by Uma Kapila
Indian Economy Book by Ramesh Singh
The Indian Economy Book by Sanjiv Verma
CBSE-UGC-NET: Economics Previous Papers (Solved) by RPH Editorial Board
Economics for UGC-Net/Slet and Other Competitive Examinations Objective Type Questions by Atlantic Research Division

ECONOMICS

UPSC CSE Mains Economics Syllabus

ECONOMICS- MCQs

Recommended Books

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ECONOMICS

​UPSC CSE Mains Economics Syllabus

ECONOMICS- MCQs

Recommended Books

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UPSC CSE Mains Economics Syllabus