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CA Foundation Economics, Syllabus, Study Material- A Complete Guide

The economics subject is the 4th paper of the CA Foundation exam and it is important. Hence, as a budding CA aspirant, you would be interested in the CA Foundation economics, syllabus, study material. The paper has two parts and also many internal chapters. The study topic primarily focuses on the capabilities of individuals as producers and consumers in the market. 

The study sheds light on the basic aspects of the economy & market and price mechanisms, The CA Foundation economics syllabus, study material also gives inputs on the theory of demand & supply and production cost. You also get to know about business cycles and indeed there is plenty to learn. 

The subject sheds light on something beyond the basic number game and it gives an added advantage to a chartered accountant. Only after a careful evaluation of its benefits, the ICAI introduced this topic in the course.  In an evolving corporate world, a CA is seen as an auditor within the business fraternity and not a mere chartered accountant. A CA is required to offer business solutions keeping in mind the current economic conditions. The knowledge gained by studying this subject should be of immense help to a chartered accountant. Let us now discuss the subject. 

Understand the weightage of each topic

There has already been mention of the economics paper being divided into two segments and also many internal chapters. Let us now discuss each of the two parts for readers. 

Part 1

The first part of the course stresses on Business Economics and has five papers. It carried 60 marks in the paper. Here are the details for readers in brief. 

  • Chapter 1 in the part 1 segment gives a brief introduction to Business Economics. This segment has about 15 to 20% weightage in the exam paper.
  • The second chapter sheds light on the Theory of Demand and Supply.  Its weightage in the exam paper is in the range of 35 to 40%.
  • In the third chapter, a student will gain input on the theory of Production and Cost price.  This segment will have 10 to 20% weightage in the exam paper.
  • Chapter 4 is about Price Determination in different markets. It is an important chapter and anywhere in the range of 25 to 30% of the questions in the paper could come from this segment. 
  • The fifth and ultimate chapter in Part 1 teaches you about Business Cycles. Anywhere in the range of 15 to 20% of the questions in the exam paper could come from this segment. 

Part 2:

In the second part of this course, a student gets to learn about Business and Commercial knowledge. This segment has six chapters and being a student, you must know the fine print. Part 2 should carry 40 marks on the paper. Here are the details for readers in brief.

  • Chapter 1 gives a brief introduction to the Business and discusses the basics. In the exam paper, this segment could carry anywhere in the range of 15 to 18% of the questions. 
  • In the second chapter, a student gets to learn about the Business Environment. Anywhere in the range of 15 to 20% of the questions in the exam paper could come from this segment. 
  • The third chapter in the second part will shed light on Business Organizations. This segment could carry anywhere between 15 to 18% of the question in the exam paper. 
  • The fourth chapter sheds light on Government Policies for Business Growth. It is an important segment and anywhere in the range of 15 to 18% of the questions will come from here. 
  • The fifth chapter gives comprehensive insights into Organizations Facilitating Business and has a weightage of 15 to 18% in the exam paper. 
  • The final chapter of part 2 educates students on Common Business Templates. This segment will carry a weightage of 15 to 18% in the exam paper. 

This is a comprehensive update on the weightage of each segment in the CA Foundation economics paper. As a student, you need to prepare accordingly for the exams. 

A Complete Guide On The Syllabus: CA Foundation Economics

Let us now focus on the CA Foundation economics, syllabus, study material. You must know the details as you are on the verge of pursuing this course. 

Part 1 Business Economics

The aim of this segment is to help a student to develop a total understanding of the concept.  This part has five segments and here is an insight into the syllabus. 

  • In the first segment of Introduction to Business Economics, the syllabus stresses the scope of business economics. This chapter also discusses the problems of an economy and the role of price mechanisms. 
  • In this second chapter, the topic is The Theory of Demand and Supply. A student gets to learn about the determination of demand and the law of demand. It is an interesting section and you get to know about elasticity of demand. Price income and cross elasticity are the two aspects that impact the elasticity of demand. 
  • The Theory of Production and Cost is the third chapter. The syllabus will shed light on the laws of production. This segment is further subdivided into Laws of Variable Proportions & Laws of Returns to Scale. In the cost segment of the topic, you will get to know about the Concept of Cost. The teaching focuses on everything from short-run to long-run costs. You get to know about average marginal costs to total fixed costs & variable costs. 
  • In the fourth chapter, you get to know about Price determination in Different Markets. The study in this segment sheds light on various forms of markets ranging from perfect competition & monopoly to even oligopoly. It teaches you about price determination in these markets. 
  • The Business Cycle segment is the fifth chapter and it is interesting. You get to know about the meaning, phases & features, and what causes these cycles. 

This is the complete syllabus for the Part 1 segment of the paper, which is Business Economics.  It carries 60 marks.

Part 2 Business Commercial Knowledge

The objective of this segment is to help a CA student develop common business knowledge and concepts. The segment also helps a CA student to understand the changes in the domestic and international markets. The syllabus here is a mix of theory and practical. Here are the details for readers in brief.

  • The first segment gives a brief introduction to business. In this section, the course gives insights into the nature of the business. What are the objectives of the business? An organization may have both economic and non-economic objectives. This segment of the course sheds light on these matters. A student also gets to know about various forms of business organizations. 
  • The second chapter will tell you about Business Environments. This segment offers the scope of developing knowledge of both macro and micro environments in a business.  It gets into the details of consumers, customers, organizations, and market suppliers and they are all a part of the macro environment. Another segment of this chapter deals with political, legal, social, cultural & technological, and also the global environment. 
  • In this third chapter, you get an insight into Business Organizations. It is a brief overview of leading companies based in India and abroad. 
  • The fourth chapter sheds light on government policies for business growth. It discusses policies that could lead to conducive business environments.  In this segment, you get to know about various socio-political terms, such as liberalization & privatization. FDI or foreign direct investment is an important term in business and you will get insights into this aspect in the fourth chapter. 
  • There are plenty of organizations facilitating business organizations and in the fifth chapter, you will get insights on these bodies. As a CA, you might have to constantly coordinate with these organizations.  SEBI, IRDA & RBI are some of the organizations that are constantly monitoring corporate organizations and you may have to constantly coordinate with them. A CA may also have to coordinate with Indian development banks such as IFCI, Exim Bank & Nabard. In this chapter, you get to know extensively about these organizations. 
  • In the final chapter of this part, the study material sheds light on common business terminologies. During your stint with the corporate sector, you will have to come across plenty of financial and market terminologies.  There could be banking terminologies and specific terms for stocks and commodities. In this dynamic business environment, a CA should know the details and this chapter will shed light on this important aspect. 

This is the complete syllabus discussed in detail and you must study hard to come out with flying colors. 

Benefit from the CA Foundation Economic mock test papers

The economics paper of the CA Foundation is an important segment, considering the role of a CA has vastly changed in this modern dynamic business environment.  A CA aspirant preparing for the economic test can also download and solve the mock test papers. These papers give you some bare idea of the question pattern you can expect in the exam. If you can solve the mock papers successfully, you can rest assured of putting up a good show on the exam day. 

Get to know about the glossary:  

In economics, you will come across various terms that can be confusing for a non-professional. There has been some mention of it earlier and you must have the updates in this regard. What are the terms meant for customer satisfaction points or shifts in the price of products for different reasons? The ICAI has compiled a glossary of more than 50 items and as a part of the course preparation, you must have the updates. You will get to know about the terms easily and for such a glossary, you are welcome to contact your coaching center. 

Some tips for the CA Foundation Economics exam

Beyond studies, you will also have to do some smart work to pass the exam with flying colors. You must have a plan and also look to allocate slots for your study time. Beyond the economics paper, there are other preparations to undertake and so, you must have a plan ready. Here are some tips to follow, so that you can do well in the CA Foundation exam. 

  • It is important to know about exam patterns and this is precisely the reason to suggest you take a mock test. You will get insights into the question pattern. Both of these segments are primarily objective types of papers. A student will have to score a minimum of 40% marks to achieve the pass figure. 
  • You must understand the concepts and formulas that fit in the best place. Do you know that concepts in business economics are interrelated to each other? Have a proper understanding of the question before writing the answers. A perfect example can be the concepts of demand and supply. They can be different but are interrelated. If they are both involved in a question, you must first understand what the examiner wants from you. 
  • Despite being an objective paper, this topic has its fair share of numerical questions. Therefore, as a part of the preparation process, you must also focus on your calculation speed. Make sure you have enough time to understand the concept of the question and then prepare the answer. 

Get professional study help

The self-preparation for such an important exam will not be appropriate and you must take help. You will require professional guidance with CA Foundation economics, syllabus, study material. There are two things that you can do here. 

  • Similar to any other segment of the CA course, you can rely on the study material from the institute. As a part of the process to help you prepare, the institute offers study material for the economics course. You are welcome to download them from the website. It should help you gain significant input into the concept. 
  • Are you still finding it tough to crack the course?  A student could still find it tough and it would be appropriate to seek help from a coaching center. The presence of reputed institutes guiding students on a range of CA foundation subjects is encouraging. They have on their faculty board some of the best professionals who have in-depth knowledge of Economics and other CA subjects. You can always enroll with any such institute and get professional guidance to crack the paper. 

These are the two options at your disposal in case; you are struggling with your CA Foundation Economic studies. Seek professional help to crack the paper if you find self study tough.   

Conclusion

This is a complete guide on the CA Foundation economics, syllabus, study material. It is an important course considering that the role of a CA has vastly changed in this modern world where business dynamics are constantly evolving. A CA needs to show deeper involvement in the company management and that is where the knowledge of economics will be invaluable. You must take this segment of the course seriously both for certification and to gain insights into the normal functioning of a company.  If you are finding the concepts a bit tough to pick up, there is always the scope to seek expert guidance from reputed institutes that offer CA coaching. They will teach you and also guide you on the secrets that should help you to solve the paper easily. The course is an important part of the CA Foundation and on completion; you can pursue the rest of the process to become a chartered accountant. 

FAQ

Will the ICAI study material be sufficient to follow the CA Foundation Economics paper

The institute certainly provides valuable study material and on downloading them, you will find the notes are in-depth. However, not every student can grasp the teachings in a personal capacity.  If you are not confident, there is always the scope to explore other options. There is a great career option in front of you and so do not be hesitant if you are not capable of decoding the study material.  Here are some of the other options; you can resort to as a part of the preparation process. 


1. Attend online lectures from experts as a part of the preparation process. 
2. You can explore more reference books.
3. You can enroll with a CA coaching institute and seek guidance from an expert faculty. 

I am from the science and humanities stream. Will Business economics be difficult for me to crack

The CA Foundation Business Economics paper comprises many initial levels of formulas and concepts. A commerce student has the upper hand because he/she will have gone through the basics. A science or art student should find it tough but not impossible. You must have a clear understanding of the concepts and then with some bit of study effort, you should come out with flying colors. 

When is the next Business Economic CA Foundation paper


This is a slightly tricky question to answer. In simple terms, the next paper will be held on June 30th, 2023. However, to sit for this paper, the last date for registration is over. If you are thinking of sitting for this paper today, you must book your seat for the December edition of the exam.

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