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COURSES OF STUDIES (SYLLABUS)[1]

M.A. (Previous) & M.A. (Final) Examinations in


ECONOMICS
For External Candidates
M.A. Economics (Previous)
Paper I
Micro Economics
Paper II
Public Finance
Paper III
Advanced Economic Statistics
Paper IV
Economics of Planning
Paper V-A Economics of Agriculture
Paper V-B
National Income Analysis & Accounting
Paper V-C
Mathematical Economics
Paper V-D Comparative Economics Systems
Paper V-E
Economics of Islam

Compulsory
Compulsory
Compulsory
Compulsory
Optional
Optional
Optional
Optional
Optional

M.A. Economics (Final)


Paper I
Macro Economics
Paper II
International Economics
Paper III
Monetary Economics
Paper IV-A History of Economic Thought
Paper IV-B Economics of Labour
Paper IV-C Econometrics
Paper IV-D Development Economics
Paper IV-E Management Economics
Paper V
Essay

Compulsory
Compulsory
Compulsory
Optional
Optional
Optional
Optional
Optional
Compulsory

Notes:
(1)
The previous examinations consist of five papers. Papers I to IV are
compulsory and one optional from Paper V.
(2)
The final examinations consist of five papers. Paper I to III and V are
compulsory and one optional from Paper IV.
(3)
Each paper shall be of 100 marks and of 3 hours' duration.
M.A. ECONOMICS (PREVIOUS)
PAPER I
MICRO ECONOMICS
1. Utility and preferences
A survey of the contribution of Utilitarian Economists. Marshalls theory of utility. Pareto and
indifference curves. The ordinal character of utility Need for a theory consistently based
upon ordinal concept of utility. Marginal rate of substitution. Diminishing marginal rate of
substitution

Preference in a two-commodity world. Choice in a two-commodity world. Changes in the data


(budget changes ) (price changes ). Three or more commodities. One commodity and money.
The validity of this theory. Demand curves and various elasticities.
2. General equilibrium of exchange

Rational economics and equilibrium. Quesnay's Tableau Economique. The Classics:


Marshall and J.B. Clark. Functional equilibrium, genetic, causal equilibrium. Paretos system
as basis of study.

Problems of general equilibrium. Conditions of stability of general equilibrium.


Character of Hicksian conditions of stability. Equilibrium and disequilibrium.
3. Value
A survey of the contributions of economists towards value theory Classical, neo-classical,
up-to-date background of value theories. Place of prices in a modern economy.
4. Market structures and equilibrium
Equilibrium of the firm and industry under perfect competition. Monopolistic competition.
Monopoly and all its aspects. Oligopoly with its problems and solutions.
5. Introduction to game theory
An introduction to game theory
6. The theory of factor prices
Marginal productivity theory. Wages: theories & problems. Interest: theories & problems.
Profit: theories. Rent: theories.
7.

Welfare Economics

PAPER II
PUBLIC FINANCE
PART I
Government Activities and Expenditure
1.
Role of government in an economy
Basic economic decisions. The market economic and the attainment of economic goals. The
consideration which have led to the understanding of government activity.
2.
Optimum levels of government activities
Application of the marginal rule. Use of price system by government. Measure of
community benefits. Estimation and measurement of costs and benefits. Use of optimum
techniques.
3.
Government expenditure
Patterns and trends (with special reference to Pakistan). Major purposes in government
expenditures. Causes of real increases in government expenditures. Effects and policies of
government expenditures.

4.
Financing of government expenditures
Sources of government revenues:
Sale of goods and services. Taxation, borrowing. Developments and nature of principal
taxation.
Taxation of income:
Income tax deductions and exemption. Income tax rate structure and tax administration the
time period problem economic consequences of income shifting and incidence sales
taxation.
PART II
Government Borrowing and Fiscal Policy:
Economics of government borrowing. Introduction to fiscal policy and analysis. Antiinflationary fiscal policy. Fiscal policy and unemployment, debit management in periods of
inflation.
PART III
Budget and Modern Government
Development of modern budgeting. Budget classification. Specialised budget problems. Three
objective of budget policy the allocation branch the distribution branch and the stabilisation
branch.
PAPER III
ADVANCED ECONOMIC STATISTICS
1.
Historical development of statistics. The scope of economic statistics, misuse of
statistics, collection, classification tabulation and interpretation of data. Census of population
and agriculture, methods f measuring national income
2.
Importance of diagrams and graph bars, sub-divided rectangles, circles, graphs
of time series and frequency distributions, histograms, frequency polygon and curve,
cumulative, frequency curve, percentage frequency curve, Lorenz curve, Pareto's law of
income distribution
3.
Measures and dispersion, co-efficient of variation, relative importance of
different averages.
4.

Idea of normal curve and its importance properties.

5.
Measures of the shape of distribution: First four moments, Sheppard's
correction, skewness, and symmetry, calculation of coefficient of skewness, kurtosis.
6.
Coefficient of correlation: Calculation of the coefficients of correlation of
grouped and ungrouped data. Rank correlation and idea of non-linear regression.

7.
Index numbers, weighted index number, Fisher's ideal formula tests of index
numbers. Cost of living numbers.
8.

Analysis of time series, methods for measuring short time oscillation

9.
Regression: Method of least squares. Fitting a straight line and a parabolic curve
of the type y = a + bx & y = ab x + cx2. Theory of sampling, random, stratified, multi-stage
and purposive sampling.
10.
Sampling distribution, standard error and probable error. Sample illustration theory
of probability.
11.
Interpolation by the use of lag range and Newton's formula. Use of logarithms and
practice on Newton's formulae.
PAPER IV
ECONOMICS OF PLANNING
1.
(a)
(b)
(c)

Principles of Planning:
Theories of economic development and their application.
Definition and techniques of planning
instruments of planning and role of various policy variables.
2.

(a)
(b)
(c)

Evaluation of planning for the acceleration of development process.


Development experience in Western European countries
Development experience in socialist countries
Development experience in under developed countries

3.
Patterns of development planning
(a)
Indicative planning, socialist planning and comprehensive planning in a
mixed economy
(b)
Annual planning, five-year planning and perspective planning.
4.

Preparation of development plan in an underdeveloped economy


(a)
Assessment of country's resources
(b)
Minimum of country's resources
(c) Need for foreign assistance
(d)
Plan strategy and target consistency
(e)
Sectoral allocations and interdependence
(f) Input-output exercise

5.

Implementation of a development plan


(a)
Private sector:
Guidelines and government policies with special reference to fiscal, monetary and foreign
trade policies
(b)
Public sector:

(i) Financing of the public sector development project via:


(a)
(a) Taxation
(b) Inflation, and
(c) Foreign aid
(ii) Public sector expenditure on:
1.
(a) Infrastructure
(b) Social service, and
(c) Commodity production
6.

Evaluation of planning experience with special reference to:


(a)
Targets vs. achievements
(b)
Agriculture vs. industry
(c) Public vs. private sector
(d)
Balanced vs. unbalanced growth
(e)
Growth vs. distribution

PART II
Planning in Pakistan

Evaluation of planning process in Pakistan

Objectives and techniques of planning. Use of models in programming.

National resources and targets for national plans

Price structure: choice of policy instructions

The role of public and private sector

Estimation of capital requirements

Sources of capital formation

Public and private sector, foreign capital inflow

Method of allocation of investment resources

Obstacles arising for investment choices sectoral constency

Strategies of growth, balance of payment and foreign aid

Manpower resources and its utilisation

Regional balance
PAPER V-B
NATIONAL INCOME ANALYSIS AND ACCOUNTING
PART 1
1.
Introduction
Macro vs. micro economics. Static vs. dynamic concepts. Micro-economic equilibrium.
Analysis and techniques
2.

National income concepts


Real and money income
Circular flow of income, its components
Ways of calculating national income
Gross and net product

3.

4.

Conceptual problems in the estimation of national income


Products to be included
Final and intermediate products
Valuation of the production
Accounting framework and national income aggregate
Income and production statement of the firm
Sector account: National income aggregate as:
i.
GNP and GNI
ii. NNP at market price
iii. GNP and income
iv. NNI at factor cost and National Income
v. Personal income and outlay
vi. Disposable income
Their definitions and uses for comparative analysis
i.
Structural
ii. Comparative analysis
iii. Over space
Criticism of national income accounting

5.

Other system of economic accounting

Input-output techniques, analytical consideration and form of input-output


accounting table, uses of analysis based on input-output relationship.

Flow of fund accounting, rational of accounting procedure, system of sector account


& uses.

Use of national income analysis for changes in:


i.
Population
ii.
Production
iii.
Productivity
iv.
Prices
v.
Employment
PART II
6.
National Accounting System of Pakistan

Methods of national income estimates in Pakistan.

Identification of problems and suggested solution


PART III
7.
Component of National Aggregate:

Simple income determinations multiplier

Factor affecting consumption expenditure

Federal policy and income consumption expenditure

Government expenditure, taxation, the equilibrium level of income.

Level of investment

Discounting and the present value of an asset. The inducement to invest.

Factors affecting investment in spending

i.
ii.
iii.

Money and interest


Interest and investment
General equilibrium
Level of employment
Factor's market and classical doctrine
Keynesian economics and the level of employment
Money wages rates employment. Full employment

M.A. (FINAL)
PAPER I
MACRO ECONOMICS
1.

Development of macro-economics. Micro economics vs. Macro economics

2.
The classical macro economics
Say's law and quantity theory Wages, prices. Employment and production. Savings,
investment and the role of interest. Wicksell's formulation and monetary and fiscal policy.
3.
The Keynesian macro economics
Obstacles of full employment. Liquidity preference significance. The liquidity trap.
Monetary management and the role of interest. The consumption function. Short run
consumption behaviour, other influences on consumption spending. Keynesian model and its
application. Comparison of Keynesian and Classical models.
4.
Equilibrium
Income, output and employment systems and effects of changes in price level.
5.
Acceleration and multiplier
Working of acceleration, its efficiency effects and coefficient. Static and dynamic multi
sector multiplier, employment and foreign trade multipliers.
6.
Growth and fluctuation
Growth, investment and employment. Stagnation or exhilaration. Cyclical fluctuations.
7.
Employment policy
Changes in monetary and fiscal policies, effect on investment limitation and alternative
policies. Static and dynamic multi sector multiplier, employment and foreign trade multiplier.
PAPER II
INTERNATIONAL ECONOMICS
1.
Evolution of international trade theory: from Ricardo to Haberler.
Measurement of cost to assess gain from trade.
2.

Pure theory international trade

Supply: The derivation of the transformation curve from the production function. Factorprice equalisation.
Demand: The offer-curves and their derivation from trade indifference curves. Consumption
pattern and trade. Foreign trade multiplier.
Terms of trade: Various concepts, their role in measuring gain from trade. Factors affecting
terms of trade of advances and developing countries.
Trade and welfare: Trade as instrument of welfare under multilateralism and various
restrictive variants.
Trade and economic growth: Trade and growth. Different implication of these interrelationships for specialised economics. Diversification of the economy for increased growth.
3.
Balance of payments (Changes and their adjustment)
The balance of payments statement. Elements in the adjustment process. Elasticities and
propensities of trade. The working of price and income effects in the payment mechanism.
Interrelation between monetary and fiscal policies and prices income changes.
Discriminatory trade and payment restrictions and balance of payments adjustment. Concept
of balance of payments in the short and long terms. Variation in payments. Disequilibria in
industrialised and developing economies. Gold standard and the payment mechanism.
4.
International investment and foreign aid
Foreign exchange: Market short terms and long terms. Capital movements. The transfer
process.
Foreign aid: Change in the concept. Terms and volume of aid. Problems of donor and
recipient countries. Absorption capacity and flow of funds.
5.
Commercial policy
Trade restrictions and the structure of world trade since the end of the World War I. Tariffs,
quotas, commodity agreements, state tradings, exchange control. These restrictions should
be studied from the point of view of their impact on the direction, composition and volume of
world trade and its effects on the economic growth and welfare of various regions.
6.
International monetary problems and institutions
Evolution of payment system in Western Europe since the World War II. Payment problems
of developing countries. Dollar shortage, its changing character, causes and cure. The
position of dollar as reserve currency, its significance for industrialised and under developed
countries. Sterling area: its changing role in the postwar period. IMF, World Bank, GATT
and other international economic institutions.
7.
Regional economic integration
Customs union issue from Jacob Viner's own words. Attitude of GATT. Regional
cooperation in Western Europe. Rational integration and economic development. Regional
arrangement in developing areas, with special reference to RCD.
Paper III
Monetary Economics

1. Supply of money
i.
Definition of money
ii.
Process of the creation of money
iii.
Institutional determinants of supply of money, government, commercial
bank, non-banking financial intermediaries (NBFIs) and central bank.
2. Demand of money
i.
Classical view
ii.
Keynesian extensions
iii.
Recent extensions
iv.
Chicago school
v.
Don Patinkin
vi.
Gurley Shaw
3. Purchasing power of money
i.
The quantity theory of money
ii.
The fundamental equations
iii.
The conditions for stability
iv.
The theories of inflation and deflation
4. Monetary theory
Integration of real sector with monetary variables:
i.
Theory of interest classical, neo-classical, Keynesian, recent
contributions
ii.
Theory of wages classical, neo-classical, Keynesian, recent
contributions
iii.
Theory of prices classical, neo-classical, Keynesian, recent contributions
5. Monetary policy
Objectives of monetary policy:
i.
Price stability
ii.
Fostering of rapid growth in the economy
iii.
Generation of employment
iv.
Maintenance of balance in international payments.
6. Monetary management
The mechanism and instruments of monetary management:
(a)
Mechanism of monetary management
i.
Interest rate mechanism
ii. Availability doctrine
iii. Portfolio approach
(b)
Tools of monetary management
i.
Re-discount rate
ii. Open market operations
iii. Reserve requirements
iv. Selective credit controls

7. External value of money


i.
Gold standard
ii. Purchasing power parity theory
iii. Balance of payments theory
iv. Manipulation of exchange rules
8. International liquidity
i.
International Monetary Fund (IMF)
ii. International Bank of Reconstruction and Development (IBRD)
iii. International Development Association
iv. International Finance Corporation
v. Need for an international currency
9. Monetary management in Pakistan
PAPER IV-A
HISTORY OF ECONOMIC THOUGHTS
A history of the following main schools of thought and main lines of development since about
1700 till about 1960. mercantilism. Classical physiocrats. Historical socialist and marginal utility
schools. Marshallian economics. Growth of welfare economics. Stockholm school and
monetary theory. Neoclassical school and theory of imperfect competition and consumer
behaviour. Growth in the theories of business cycles and international trade. Monetary theory up
to 1936. the new economics and J.M. Keynes.
PAPER IV-B
ECONOMETRICS
1. Introduction to the theory of econometrics. An outline of procedure and main
discoveries.
2. Elements of matrix algebra, matrices, determinants, vectors and vector
differentiations, characteristic roots and vectors.

3. Errors in Variables
The two-variable linear case
The classical approach
Prediction problems
Grouping of observations
Use of instrumental variables
4. Auto Correlation

The two-variable case

Consequences of auto-correlated disturbances

Generalised least squares

Estimation methods
Prediction problems
Multicollinarity
Hetroscedasticity
Lagged variables, dummy variables.

5. Simultaneous equation problems

Simultaneous equation system

Identification

Limited information sign equation (LISE)

Lease variance ratio (LVR)

Two stage least squares

k-class estimator

Tests of identifying restrictions

Full informations maximum likelihood (FIML)

Three-stage least squares.


6. Technical economic relations

Micro-economic cost curves

Technical development
7. Econometric model

The description of complete systems

The movements of complete systems

The purpose and logic of economic policy.


PAPER IV-E
MANAGEMENT ECONOMICS
PART I
1.

Unified concept of management


Planning, organisation, coordination, motivation, control

2.

The organisational hierarchy


The board of directors, the chief executive, the supervisor

3.

Departmentation
Basic departmentation, the assignment of activities

4.

Staff and line relationship

5.

Centralisation and decentralisation

6.

Problems of management

PART II

1.
Product strategy
Opportunities for multiple products. Policy on adding new products. Policy on dropping old
products.
2.
Pricing strategy
Pricing lasting products. Pricing perishable products. Pricing standard when competitors are
few. Cost plus pricing. Cyclical pricing. Product line pricing.
3.
Promotional strategy
The economics of advertising. Methods of determining total advertising budget. Cyclical
fluctuations of advertising. Measuring economic effects of advertising.
4.
Introduction to operational research and managements
Linear programming. Queueing theory, critical path scheduling and PERT analysis. Theory
of games. Dynamic programming and replacement. Policy ranking techniques simulations.
5.

Problems of management in underdeveloped countries

6.
Project evaluation
Public investment. Private investment.
7.

Business structure and management methods in Pakistan

PAPER V
ESSAY
The paper shall comprise all the subject taught as compulsory and optional papers at the M.A.
Economics examinations in the University of Karachi.

[1] Please refer to the original 'Courses of Studies' (Syllabus) issued by University of Karachi for the books
prescribed and for the syllabus of other optional subjects, which are not listed here