Economics

Syllabus

General Certificate of Education

(Advanced Level)
Grade 12 and 13
(Implemented from 2017)

Department of Commerce
Faculty of Science and Technology
National Institute of Education
www.nie.lk
Economics
Grade 12 and 13 - syllabus

National Institute of Education

First print 2017

ISBN :

Department of Commerce
Faculty of Science and Technology
National Institute of Education
www.nie.lk

Printed by :
Content
Pages

1.0 Introduction --------------------------------------------------------------------------------------------------------- i

2.0 National Goals ------------------------------------------------------------------------------------------------------ iii

3.0 Basic Competencies ----------------------------------------------------------------------------------------------- iv - v

4.0 Objectives of the syllabus --------------------------------------------------------------------------------------------- vi

5.0 Relationship between the common national goals and the objectives of the syllabus ------------------------------------- vii

6.0 Syllabus- --------------------------------------------------------------------------------------------------------------

6.1 Grade 12 syllabus ------------------------------------------------------------------------------------------------ 1 - 37

6.2 Grade 13 syllabus ----------------------------------------------------------------------------------------------- 38 - 68

7.0 School policies and programs ----------------------------------------------------------------------------------------- 69 - 70

8.0 Assessment and evaluation -------------------------------------------------------------------------------------------- 71

i
 1.0 Introduction

A competency based curriculum for Economics at the GCE Advanced Level was introduced to the school system in the year 2009. The subject of
Economics covers a wide area of study and it includes Microeconomics, Macroeconomics, International economics and Development economics. All
these fields of economics and the global influences that have taken place over time, have influenced the preparation of a revised competency based
curriculum that becomes effective from the year 2017.

For the students who study a variety of subjects for the GCE Advanced Level examinations currently covering the fields of Arts, Commerce and
Technical subjects, the students studying Economics which is an important, useful and popular subject, it is anticipated that they will not only acquire
knowledge but also become citizens who are enriched with useful attitudes, talents and become rational citizens who will make a fruitful and effective
contribution to the economic development of Sri Lanka.

Economics is a social science that is closely connected to human life. While social sciences do a study of human behaviour in society from different
angles, economics provides an opportunity to study how humanity should behave from an economic perspective. Therefore, the study of Economics
provides a good base to engage in daily activities taking decisions as a rational citizen.

The areas of Commerce, Management and Accounting are based on the subject of Economics. Because of this, Economics is included as a main
subject in study programmes leading up to degrees in Commerce, Management and Accounting. Therefore, higher study opportunities in professional
and academic areas become accessible to students studying Economics as a subject.

Since Economics is a practical subject that impacts the daily life of a human person, the preparation of the learning – teaching process must look
beyond the classroom to motivate students to acquire useful experiences from the outside world as an important aspect. It is anticipated that you as
teachers, too will take the necessary steps to ensure that your theoretical knowledge is up-to-date.

i
(i) National building and the establishment of a Sri Lankan identity through the promotion of national cohesion, national integrity, national
unity, harmony, and peace, and recognizing cultural diversity in Sri Lanka’s plural society within a concept of respect for human dignity.

(ii) Recognizing and conserving the best elements of the nation’s heritage while responding to the challenges of a changing world

(iii) Creating and supporting an environment imbued with the norms of social justice and a democratic way of life that promotes respect for
human rights, awareness of duties and obligations, and a deep and abiding concern for one another.

(iv) Promoting the mental and physical well-being of individuals and a sustainable life style based on respect for human values.

(v) Developing creativity, initiative, critical thinking, responsibility, accountability and other positive elements of a well-integrated and balanced
personality.

(vi) Human resource development by educating for productive work that enhances the quality of life of the individual and the nation and
contributes to the economic development of Sri Lanka.

(vii) Preparing individuals to adapt to and manage change, and to develop capacity to cope with complex and inforeseen situations in a rapidly
changing world.

(viii) Fostering attitudes and skills that will contribute to securing an honorable place in the international community, based on justice, equality and
mutual respect.

iii
3.0 Basic Competencies
The following Basic Competencies developed through education will contribute to achieving the above National Goals.

(i) Competencies in Communication

Competencies in Communication are based on four subsets: Literacy, Numeracy, Graphics and IT proficiency.
Literacy : Listen attentively, speck clearly, read for meaning, write accurately and lucidly and communicate ideas effectively.

Numeracy : Use numbers for things, space and time, count, calculate and measure systematically.

Graphics : Make sense of line and form, express and record details, instructions and ideas with line form and color.

IT proficiency : Computeracy and the use of information and communication technologies (ICT) in learning, in the work environment and in
personal life.

(ii) Competencies relating to Personality Development

- General skills such as creativity, divergent thinking, initiative, decision making, problem solving, critical and analytical thinking, team
work, inter-personal relations, discovering and exploring;
- Values such as integrity, tolerance and respect for human dignity;
- Emotional intelligence.

(iii) Competencies relating to the Environment

These competencies relate to the environment : social, biological and physical.

Social Environment : Awareness of the national heritage, sensitivity and skills linked to being members of a plural society, concern for
distributive justice, social relationships, personal conduct, general and legal conventions, rights, responsibilities, duties and obligations.

Biological Environment : Awareness, sensitivity and skills linked to the living world, people and the ecosystem, the trees, forests, seas,
water, air and life-plant, animal and human life.
iv
 Physical Environment : Awareness, sensitivity and skills linked to space, energy, fuels, matter, materials and their links with human living,
food, clothing, shelter, health, comfort, respiration, sleep, relaxation, rest, wastes and excretion.
Included here are skills in using tools and technologies for learning, working and living.

(iv) Competencies relating to Preparation for the World of Work.

Employment related skills to maximize their potential and to enhance their capacity.

to contribute to economic development,

to discover their vocational interests ad aptitudes,

to choose a job that suits their abilities, and

to engage in a rewarding and sustainable livelihood.

(v) Competencies relating to Religion and Ethics

Assimilating and internalizing values, so that individuals may function in a manner consistent with the ethical, moral and religious modes of
conduct in everyday living, selecting that which is most appropriate.

(vi) Competencies in Play and the Use of Leisure

Pleasure, joy, emotions and such human experiences as expressed through aesthetics, literature, play, sports and athletics, leisure pursuits
and other creative modes of living.

(vii) Competencies relating to ‘ learning to learn’

Empowering individuals to learn independently and to be sensitive and successful in responding to and managing change through a transformative
process, in a rapidly changing, complex and interdependent world.

v
4.0 Objectives of the syllabus

 Creating a rational thinking in an economic way.

 Providing a critical understanding and scientifically analyzing the basic economic problems in a society and the alternative method of
solving.

 Providing a basis for the wellbeing of society by using economic concepts and theories and analysing trends of practical economic
problems.

 Motivating to the inquire the rational behaviour of firms and individuals at the market.

 Analysing on the behaviour of macro-economic variables and the inter-relationships between them.

 Providing the ability to analyse contemporary economic policies.

 Motivating to inquire the government intervention to achieve of macro-economic objectives.

 Motivating to analyse the inter-relationships between international trade, international finance and economic integration.

 Developing the skills required to inquire the diversity of development comparatively.

 Developing the skills necessary to see the detailed performance of the Sri Lankan economy .

 Creating an approach for higher education.

vi
 5.0 Relationship between the common national goals and the objectives of the syllabus.

Common National Goals

Objectives of the syllabus
i ii iii iv v vi vii viii
² Creating a rational thinking in an economic way.
 
² Providing a critical understanding and scientifically analyzing the basic economic problems in
a society and the alternative method of solving.  
² Providing a basis for the wellbeing of society by using economic concepts and theories and
analysing trends of practical economic problems.  
² Motivating to the inquire the rational behaviour of firms and individuals at the market.
.
 
² Analysing on the behaviour of macro-economic variables and the inter-relationships
between them.  
² Providing the ability to analyse contemporary economic policies.
 
² Motivating to inquire the government intervention to achieve of macro-economic
objectives.
 
² Motivating to analyse the inter-relationships between international trade, international
finance and economic integration. 
² Developing the skills required to inquire the diversity of development comparatively.  
² Developing the skills necessary to see the detailed performance of the Sri Lankan economy.
 
.
² Creating an approach for higher education.  
vii
 Proposed plan in the allocation of competency levels in the syllabus into the school terms

Term competency and competency level No. of No. of competency levels

Grade
periods

First term From competency level 1.1 to competency 104 17 competency levels
level 2.8

Second term From competency level 2.9 to competency 98 14 competency levels

Grade 12
level 4.5

Third term From competency level 4.6 to competency 98 12 competency levels

level 6.4

First term From competency level 7.1 to competency 101 14 competency levels
level 8.6

Second term From competency level 8.7 to competency 103 15 competency levels
Grade 13
level 10.7

Third term From competency level 0.8 to competency 96 13 competency levels

level 12.3

2
6.0 Syllabus

Grade 12 Syllabus Grade 13 Syllabus

No. of No. of
Competency Competency
Periods Periods

1.0 Comparatively analyses the alternative ways of 50 7.0 Investigates the behaviour of money 60
solving the basic economic problems in an and price levels that affects economic
economic system. activities and banking system.
2.0 Analyses demand, supply, elasticity and 65
80 8.0 Investigates government intervention to
market equilibrium. achieve macro economic objectives.
3.0 Investigates government intervention in the 30 9.0 Analyses the theoretical basis
40
free market. of International trade and explores
4.0 Explores the rational behaviour of production 50 how international trade influences Sri
units in the market.. Lankan economy.
45
5.0 Demonstrates the readiness of preparing the 10.0 Explores foreign finance affects the Sri
national accounting by considering the 55 Lankan economy.
macroeconomic operations.
11.0 Exhibits the interest of contribution to 70
6.0 Analysis of the determination of macro economic 35 sustainable development by explaining
equilibrium. the diversity of development.

12.0 Investigates the Sri Lankan economic 20

structure and economic policies
300 300

1
 7.0 Proposed competencies, Competency levels, Content, learning outcomes and No. of periods - Grade 12 Economics
30

No. of
Competency Competency Level Subject content Learning outcomes
Periods
1. C o m p arat i v el y 50
analyses the 1.1Examines the foundation • Economic behaviour of people • Describes economic behaviour of people 06
alternative ways of of Economics. • Economics as a social science • Confirms economics as a social science.
solving the basic • Definition of Economics • Defines the Economics and explains its
economic problems • Importance of learning economics subject scope.
in an economic • Microeconomics and Macroeconomics • Explains the importance of learning
system. • Positive and normative statements Economics.
• Explains the difference between
microeconomics and macroeconomics
with examples
• Explains the difference between positive
and normative statements with examples.

1.2Emphasizes the utilization • Human needs and wants • Explains the difference between human 06
of goods and services to • Goods needs and wants with examples.
fulfill human needs and • Economic goods • Explains the difference between
wants. • Non-economic goods economic goods and non-economic
• Resources goods with examples.
• Economic resources and • Shows the way of converting non-
Non-economic resources. economic goods to economic goods.
• Renewable resources and • Classifies resources as economic
Non-Renewable resources. resources and non-economic resources.
• Classifies natural resources as
renewable resources and
non-renewable resources with
examples.
• Explains the importance of protection of
natural resources.
1
 No. of
Competency Competency Level Subject content Learning outcomes
Periods

1.3 Identifies the • Factors of Production 06

• Classifies factors of production that used
characteristics of factors • Land
to produce goods and services.
of production and • Labour
• Shows the characteristics of factors of
analyses the determinants • Capital
production separately.
of factor productivity. • Entrepreneurship
• Defines factors productivity.
• Factor productivity
• Describes the determinants of
• Definitions
factor productivity.
• Determinants of productivity
• Technology
• Human Capital
• Management
• Division of Labour
• Specialization

2
 No. of
Competency Competency Level Subject content Learning outcomes
Periods
1.4 Analyses the central • Scarcity • Defines the concept of scarcity. 06
problem of economics, • Choice • Provides reasons for scarcity.
logically. • Opportunity cost
• Describes alternative uses of resources and
explains the way of choice is made with,
examples.
• Defines the concept of opportunity cost.
• Analyzes the concept of opportunity cost
with examples.
• Analyses the situations of zero opportunity
cost with examples.
• Explains the relationship between scarcity
and opportunity cost.

1.5.Inquires the Basic • Names the Basic Economic Problems. 04

• Basic Economic Problems
Economic Problems. • Analyses the Basic Economic Problem
• What to produce and in what
quantity? such as what to produce in what quantity.
• How to produce? • Analyses the Basic Economic Problem of
• For whom to produce? how to produce.
• Analyses the Basic Economic Problem of
whom to produce.

3
 No. of
Competency Competency Level Subject content Learning outcomes
Periods
1.6.Analyses the ways of • Economic systems • Defines economic systems. 04
organizing to solve • Definition • Explains the elements of economic
basic economic • Elements systems.
• Main actors
problems. • Names main actors of economic
systems.
• Explains the role of main actors within
economic systems.

• Describes the criteria for the

1.7.Classifies economic • Criteria for classification economic 06
classification of economic systems.
systems using various systems • Defines the market economic system.
criteria. • Classification of economic systems • Explains the characteristics and
• The market economic systems operation of the market economic
• The command economic systems system.
• The mixed economic systems • Analyses the ways of solving basic
• New trends of economic systems economic problems by market
• Criteria in the assessment of the performance economic system.
of an economic system. • Defines the command economic system.
• Explains the characteristics and
operation of the command economic
system.
• Analyses the way of solving basic
economic problems by command
economic system.

4
 No. of
Competency Competency Level Subject content Learning outcomes
Periods
• Defines the mixed economic system.
• Explains the characteristics and
operation of the mixed economic system.
• Analyses the way of solving basic
economic problems by a mixed
economic system.
• Investigates new trends related to
economic systems.
• Lists criteria in the assessment of the
performance of an economic system.

1.8.Analyses the behaviour • Production Possibility Frontier • Defines the Production Possibility 06
of opportunity cost using • Definition Frontier.
the Production Possibility • Assumptions • Names the assumptions that are used to
Frontier. • Graphical and numerical presentation of construct Production Possibility
opportunity cost Frontier.
• Constant opportunity cost • Creates Production Possibility Frontier
• Increasing opportunity cost under the constant and increasing
opportunity cost situations.
• Analyses the behaviour of opportunity
cost using Production Possibility Frontier.
• Presents the factors influencing constant
and increasing opportunity cost situations.
• Confirms that increasing opportunity cost
is as more realistic.

5
 No. of
Competency Competency Level Subject content Learning outcomes
Periods
1.9 Represents basic •Illustration of the microeconomic concepts • Presents microeconomic concepts with 06
concepts of economic and macroeconomic concepts with Production Possibility Frontier.
change of production Production Possibility Frontier.
• Presents various macroeconomic
capacity using Production • Scarcity
concepts with Production Possibility
Possibility Frontier. • Production efficiency
Frontier.
• Underutilization of resources
• Shows change in production capacity
• Allocative efficiency
with Production Possibility Frontier
• Economic recession
based on the factors affecting
• Allocation of resources between present
production capacity.
consumption and future consumption
• Change in production capacity
• Economic decline
• Change in productivity of factors.
• Economic growth

6
 No. of
Competency Competency Level Subject content Learning outcomes
Periods
2. Analyses
80
demand, supply, 08
elasticity and 2.1 Analyses the Theory of • Demand • Defines Demand.
market equilibrium. Demand and The Law of • Definitions • Explains the deference between Individual
. Demand using • Individual demand and Market demand demand and market demand.
determinants of demand. • Determinants of demand • Names determinants influencing demand.
• The Theory of Demand (Function of • Describes how each determinant
Demand) influence demand.
• The Law of Demand • Explains function of demand.
• Methods of presenting the Law of Demand
• Defines Law of Demand.
• Demand schedule
• Presents the Law of Demand with
• Demand curve
demand schedule, demand curve and
• Demand equations
demand equation.
• Reasons for the Law of Demand
• Names out the price effect as a reason for
• Price effect
the Law of demand.
• Income effect
• Substitution effect • Confirms the Law of Demand with
• Exceptions to the law of Demand the income effect and substitution effect.
• Giffen goods • Describes exceptions to the Law of
• Demonstrative goods Demand.

7
 No. of
Competency Competency Level Subject content Learning outcomes
Periods

• Compares the different between change 08

2.2.Compares the difference
• Change in quantity demanded
between change in the in quantity demand and change in
• Increase in quantity demanded demand.
quantity demanded and
• Decrease in quantity demanded • Presents determinants that influence the
the change in demand.
• Change in demand change in demand and change in quantity
• Increase in demand demand separately.
• Decrease in demand • Analyses the change in quantity demand
based on demand curve.
• Analyses the change in demand based on
demand curve.

8
 No. of
Competency Competency Level Subject content Learning outcomes
Periods

• Defines the elasticity of demand. 06

2.3. Analyses the price
• Elasticity of demand
elasticity of demand with • Names types of elasticity of demand.
• Definition
defining elasticity of • Defines the price elasticity of demand.
• Types
demand. • Defines the point price elasticity of
• Price elasticity of demand
demand.
• Cross price elasticity of demand
• Calculates the point price elasticity of
• Income elasticity of demand
demand based on data.
• Price elasticity of demand
• Defines the arc price elasticity of
• Definition
demand.
• Point price elasticity of demand
• Calculates the arc price elasticity of
• Calculation
demand based on data.
• Arc price elasticity of demand
• Describes the relationship between
• Calculation
elasticity of demand and slope of the
• Price elasticity of demand and slope
demand curve.
of demand curve
• Calculates the point elasticity of demand
• Estimates price elasticity of demand with
at a definite price when the demand
the demand equation
equation is given.
• The types of price elasticity of demand
• Presents the types of price elasticity of
based on coefficient of elasticity
demand based on the coefficient value
of the price elasticity of demand.

9
 No. of
Competency Competency Level Subject content Learning outcomes
Periods

2.4 Inquires rational • Determinants of price elasticity of demand. • Names determinants of price elasticity of 06
decision making based on • The relationship between price elasticity of demand.
price elasticity of demand. demand and consumer outlay / producer • Analyses how determinants of price
revenue elasticity of demand influence price
• Importance of price elasticity of elasticity of demand.
demand. • Describe the relationship between price
elasticity of demand and consumer
outlay / producer revenue.
• Explains the importance of price elastic-
ity of demand.

2.5. Inquires rational • Cross price elasticity of demand • Defines the cross price elasticity of 06
decision making • Definition demand.
based on cross • Calculation • Calculates the cross price elasticity of
price elasticity of • Classification of goods according to the demand based on data.
demand. elasticity coefficient • Classifies substitutes and complementary
• Substitute goods goods based on coefficient of
• Complementary goods cross price elasticity of demand.
• The importance of cross price • Shows the importance of cross price
elasticity of demand elasticity of demand.

10
 No. of
Competency Competency Level Subject content Learning outcomes
Periods
2.6 Inquires rational • Income elasticity of demand. • Defines income elasticity of demand. 06
decision making based • Definition • Calculates coefficient of income elasticity
on income elasticity of • Calculation of demand using data.
demand. • Classification of goods according to the • Classifies goods based on coefficient of
elasticity coefficient income elasticity of demand.
• Normal goods • Shows importance of coefficient of
• Essential goods income elasticity of demand.
• Luxury goods
• Inferior goods
• The practical importance of income
elasticity of demand

11
 No. of
Competency Competency Level Subject content Learning outcomes
Periods
08
2.7 Analyses the Theory of • Supply • Defines supply.
Supply and the Law of • Definitions • Compares the difference between firm’s
Supply based on • Firm’s supply and market supply supply and market supply.
determinants of supply. • Determinants of supply • Names determinants of supply.
• The Theory of Supply(Function of • Presents the relationship between supply
supply) and determinants of supply using the
• The Law of Supply supply function.
• Methods of presenting the Law of • Defines The Law of Supply.
supply • Presents the Law of Supply with supply
• Supply schedule schedule, supply curve and supply
• Supply equations equation.
• Supply curve • Analyses The Law of Increasing
• Reasons for The Law of Supply Opportunity Cost as a reasons for the
• The Law of Increasing Opportunity Law of Supply.
Cost (Increasing marginal cost)

12
 No. of
Competency Competency Level Subject content Learning outcomes
Periods
• Change in quantity supplied • Explains the different between change in 06
2.8 Compares the
• Increase in quantity supplied quantity supplied and change in supply.
difference between
• Decrease in quantity supplied • Presents determinants affecting the
change in quantity
• Change in supply change in quantity supplied and change in
supplied and change in
• Increase in supply and reasons supply separately.
supply.
• Decrease in supply and reasons • Analyses how quantity supplied varies
with a change in price of a good based
on a supply curve.
• Analyses how supply changes with
change in other factors while price
remains constant, based on a supply
curve.

13
 No. of
Competency Competency Level Subject content Learning outcomes
Periods

06
• Price elasticity of supply • Define price elasticity of supply.
2.9 Analyses the
• Definition • Describes the way of calculating point
importance of price
• Point price elasticity of supply and arc price elasticity of supply.
elasticity of supply
• Calculation • Calculates point and arc price elasticity of
with estimating its value.
• Arc price elasticity of supply supply using given data.
• Calculation • Describes the relationship between price
• Price elasticity of supply and the slope of elasticity of supply and slope of the
supply curve supply curve.
• Estimating price elasticity of supply with • Lists types of price elasticity of supply
supply equation based on its coefficient value.
• The type of price elasticity of supply based on • Describes determinants of price elasticity
coefficient of price elasticity of supply of supply.
• Determinants of price elasticity of supply • Explains importance of price elasticity of
• Importance of price elasticity of supply supply.

14
 No. of
Competency Competency Level Subject content Learning outcomes
Periods

2.10 Analyses market • Market • Defines market. 06

economically. • Definition • Names functions of market.
• Functions • Explains goods and services market with
• Types of market examples.
• Goods and services market • Explains factor market with examples.
• Factor market • Comparatively analyses the difference
• The difference between Goods and services between goods market and factor
market and factor market market.

15
 No. of
Competency Competency Level Subject content Learning outcomes
Periods

2.11. Examines how • Market equilibrium • Defines market equilibrium. 08

market equilibrium is • Definition • Names alternate methods by which
determined. • Methods of determination market market equilibrium can be shown.
equilibrium • Analyses market equilibrium based on
• By demand and supply schedules demand and supply schedules.
• By demand and supply curves • Analyses market equilibrium based on
• By demand and supply equations demand and supply curves.
• Concepts related to market equilibrium. • Analyses market equilibrium based on
• Excess demand demand and supply equations.
• Excess Supply • Defines concept related to market
• Excess demand price equilibrium.
• Excess supply price • Displays concept related to market
• Consumer surplus equilibrium using graphs.
• Producer surplus • Calculates concepts related to market
• Economic surplus equilibrium.

2.12 Analyses change in • Change in market equilibrium • Explains change in market equilibrium. 08
market equilibrium. • Change in demand with constant supply • Analyses change in market equilibrium
• Change in supply with constant demand with demand and supply schedules and
• Change in both demand and supply equations.

16
 No. of
Competency Competency Level Subject content Learning outcomes
Periods

3. Investigates 30
government • Demonstrates the ways of government
3.1 Analyses the way of • Ways of the government intervention to 02
intervention intervention to the market.
intervention by the the market
to the market.
government to the • Imposing the taxes
market. • Providing the subsidies
• Price controls
• Price stabilization
08

3.2 Analyses government • Imposing taxes over goods

• Imposing taxes over suppliers • Names the ways of imposing the taxes on
intervention to the free • Imposing taxes over buyers products.
market through a unit tax. • Defines the proportional tax.
• Tax rates
•Proportional (Ad-volarem ) tax • Defines the unit tax.
• Definitions • Shows the effect on supply curve when
•Unit (Specific ) Tax imposing a unit taxes over supplier.
• Definitions • Defines unit tax.
• Imposing a unit taxes over supplier • Shows impact of unit tax on market
• Adjusting the unit tax equilibrium when imposing a unit tax
• To Demand and supply
over a supplier through a demand and
schedule
• To Demand and supply curves supply schedules.
• To Demand and supply • Shows impact of unit tax on market
equations equilibrium when imposing a unit tax
• Impact of unit taxes on welfare
• To consumer surplus over a supplier through a demand and
• To produces surplus supply curves.
• To government revenue
• To total welfare
17
 No. of
Competency Competency Level Subject content Learning outcomes
Periods
• Introduces imposing a unit tax over a • Shows impact of unit tax on market
buyer
equilibrium when imposing a unit tax
over a supplier through a demand and
supply equations.
• Analyses welfare effect of unit tax.
• Introduces imposing a unit tax over a buyer.

04
3.3 Analyses the distribution •Presents the distribution of incidence of tax • Defines incidence of tax.
of incidence of tax after with demand and supply curves. • Describes the distribution of incidence of tax
the unit tax impose on between consumer and producer based on
supplier. the type of price elasticity of demand and
supply.

18
 No. of
Competency Competency Level Subject content Learning outcomes
Periods
3.4Analyses the government • Providing a unit subsidy over a supplier. • Defines the unit subsidy given to supplier.
08
intervention to the • Definition of unit subsidy • Analyses the effect over market
market with providing of • Adjusting the unit subsidy. equilibrium when providing unit subsidy
a unit subsidy ever over a supplier by using the demand and
• To supply schedule
supplier. supply schedules.
• To supply curve • Analyses the effect over market
• To supply equation equilibrium when providing unit subsidy
over a supplier by using the demand and
• Welfare effect of unit subsidy
supply curves.
• To consumer surplus • Analyses the effect over market
• To producer surplus equilibrium when providing unit subsidy
over a supplier by using the demand and
• To government revenue
supply equations.
• To total welfare • Analyses the welfare effect of a unit
subsidy.

19
 No. of
Competency Competency Level Subject content Learning outcomes
Periods

3.5 Examines the effects of • Defines the price control. 08

•Price control
price control and price •Definition. • Names out the different forms of
stabilization on market price control.
•Different forms of price control • Defines the maximum price policy
operations.
• Maximum price policy and demonstrates with demand and
supply curves.
• Minimum price policy
• Analyses the economic effects of
• Maximum price/ Price Ceiling maximum price policy.
• Effective maximum price and the • Describe the arrangement to make
changes associated meaningful of maximum price
policy.
• Economic effects
• Defines the minimum price policy
• Arrangement to make meaningful of and demonstrates by demand and
maximum price policy supply curves.
• Minimum price/ Floor price • Presents the economic effects of
minimum price policy.
• Effective minimum price
• Describe the arrangement to make
• Economic effects meaningful of minimum price
policy.
• Procedures converting the
• Defines the certified price policy.
minimum price into guaranteed • Explains the procedures that
converting the minimum price into
price.
guaranteed price.
•Purchasing of excess supply • Introduces the procedures for price
stabilization.
• Deficiency payment system
• Price stabilization

20
 No. of
Competency Competency Level Subject content Learning outcomes
Periods
4. Explores the 50
rational behaviour of 4.1 Analyses the behaviour • Business firms • Introduces business firms and explains its 08
production firms of short term and long • Introduction various forms.
within the market term production process • Production Process • Explains the relationship between inputs
and behaviour of of a business firm. • Production function and outputs based on production
factor market. • Short run function.
• Long run • Explains the difference between short
• Short run production process term and long term of the production
• The Law of Diminishing Marginal process based on a production function.
Returns. • Defines The Law of Diminishing Marginal
• Total Product Returns.
• Average Product • Presents assumptions of the Law of
• Marginal Product Diminishing Marginal Returns.
• Long run production process • Presents The Law of Diminishing Returns
• The Law of Returns to scale numerically and graphically.
• Increasing returns to scale • Defines concept of total product, average
• Decreasing returns to scale product and marginal product of short
• Constant returns to scale run production process.
• Analyses the relationship among total
product and marginal product.
• Defines The law of Returns to Scale
• Analyses the reasons for Increasing
returns to scale, decreasing returns to
scale and constant returns to scale of the
production process.

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Competency Competency Level Subject content Learning outcomes
Periods
4.2 Makes a comparative • Cost of production • Defines cost of production. 08
analysis of basic concepts • Introduction • Explains the basic concept related to the
related to the production • The basic concept related to the production process.
process. production process. • Explains the difference between direct
• Direct cost and indirect cost cost and indirect cost with examples.
• Accounting cost and Economic cost • Explains the difference between
• Sunk cost Accounting cost and Economic cost with
• Normal profit as a cost examples.
• Explains sunk cost with examples.
• Defines normal profits.
• Presents reasons for the inclusions of
normal profit on production cost.

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Competency Competency Level Subject content Learning outcomes
Periods
4.3 Analyses the behaviour • Presents elements of short run production • Defines elements of the short term 08
of cost in the cost numerically and graphically production cost.
production process. • Total Fixed Cost (TFC) • Computes elements of the short term
• Total Variable Cost (TVC) production cost.
• Total Cost (TC) • Analyses the elements of the short term
• Average Fixed Cost (AFC) production cost based on schedules and
• Average Variable Cost (AVC) graphs.
• Average Total Cost (ATC) • Analyses the relationship between short run
• Marginal Cost (TC) production cost curves and product curves.
• Presents the relationship between Short run • Analyses the behaviour of long run average
production costs curves and product cost curves and its relationship with
curves returns to scale.
• Behaviour of long run average cost • Defines economies of scale and diseconomies
curve. of scale
• Presents reasons for economics of scale and
diseconomies of scale.

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Competency Competency Level Subject content Learning outcomes
Periods

04
4.4 Compares basic features • Market structures and their basic • Names market structures.
of the market structures. characteristics • Explains the basic characteristics of the
• Perfect competition Perfect competition.
• Monopoly • Explains the basic characteristics of a
• Monopolistic competition Monopoly.
• Oligopoly • Explains the basic features of
Monopolistic competition.
• Explains the basic features of Oligopoly.
• Compares the basic characteristics of
market structures.

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 No. of
Competency Competency Level Subject content Learning outcomes
Periods
4.5 Investigates the short • Firm’s and market demand curves of • Introduces firm’s and industry’s demand 10
run behaviour of a perfect competition. curves of perfect competitions
perfectly competitive • Basic approaches of profit maximization of separately.
firm and industry. • Explains, the relationship between firm’s
a firm.
• Total revenue-Total cost approach demand curve and industry’s demand
• Marginal revenue-Marginal cost curve based on graphs.
approach • Names basic approaches of profit
• The short run behaviour of a perfectly maximization of profit of a firm.
competitive firm in the perfect • Analyses the Total cost and Total revenue
competitions. approach based on statistics and graphs.
(Numerically & Graphically) .• Analyses the marginal cost and marginal
• Normal profit
revenue approach based on statistics and
• Abnormal profit
graphs .
• Subnormal profit
• Analyses, the short term behaviuour of a
• Incurring losses
• Shut down point perfectlycompetitive firms based on
• Short run supply curve schedules and graphs.
• Market supply curve • Presents abnormal profits, normal profits
• Industry equilibrium and incurring losses and shut down point
of a perfectly competitive firms through
graphs.
• Analyses, the behaviour of short run
supply curve of a firm using graphs.
• Analyses the equilibrium of the perfect
competitive market using the market
supply curves demand curves.

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Competency Competency Level Subject content Learning outcomes
Periods
4.6 Investigates the • Factor market • Investigates the factor demand . 12
behaviour of the factor •. Factor demand • Investigates the factor supply.
market. • Factor supply • Investigates the determination of factor
•. Factor price price.
• Earnings of factor • Describes earnings of factors.
• Transfer earning • Shows transfer earning and economic rent
• Economic rent using demand and supply curves.
• Explains the difference between transfer
earning s and economic rent with examples.

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Competency Competency Level Subject content Learning outcomes
Periods
5.0 Demonstrates the 55
readiness of 5.1 Inquires the macro • Macroeconomic objectives and variables • Names the macro economic objectives 06
preparing the economic objectives, • Macroeconomic problems and macroeconomic variables.
national accounting macroeconomic • Macroeconomic fluctuations • Explains the macro economic problems.
by considering the problems and • Business cycle • Describes the business cycle.
macroeconomic macroeconomic policies. • Different stages
operations. . • Introduces the different stages of business
• Expansion cycle.
• Recession • Explain the economic fluctuations with
• Peak business cycle.
• Trough • Explain the macroeconomic policies.
• Potential output and actual .
output
• Output gap
• Macroeconomic policies

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 No. of
Competency Competency Level Subject content Learning outcomes
Periods
5.2 Analyses the different • Economic actors • Explains by naming the economic 05
approaches of national • Circular flow of simple economy activities related to the economic actors.
accounting by circular • Explains the mutual relationships among
• Economic actors and mutual functions
flow of Income. economic actors by using economy
• Approaches for national accounting circular flow of income of a simple
. economy.
• Output approach
• Derires three approaches of national
• Income approach
accounting by using circular flow of
• Expenditure approach income of a simple economy.

5.3 Demonstrates the • Preparations of national accounting on

output approach • Explains the multiple counting error 08
preparedness for
national accounting on • Multiple counting error
• Explains the final output method and
• Methods of avoiding the multiple counting
output approach. presents the way of preparing the national
error
• Final output method accounting based on that method.
• Value added method • Explains the value added method and
• Gross Value of Output and Value presents the way of preparing the national
. of the Intermediaries. accounting based on that method.
• Explains the concept of Gross Value of
Output.
• Explains the concept of Value of
Intermediaries.

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 No. of
Competency Competency Level Subject content Learning outcomes
Periods
5.4 Analyses the way of •Production boundary • Explains the production boundary 10
• Economic activities on standard industrial • Explains the items include and exclude in
estimating the gross
classification of Sri Lanka.
domestic production on production boundary.
•Composition of based on institutional • Introduces economic activities
output approach and
sectors. based on standard industrial
the concepts related for
• Non-Financial Corporations Sector activities of Sri Lanka.
that. • Explains the composition of economic
(NFC)
activities on institutional sectors.
• Financial Corporations Sector(FC) • Names out the different prices in
• General Government Sector(GG) estimating the value.
• Explains the concepts of basic price,
• Household Sector(HH)
producer’s price and purchaser’s price
. • Non-Profit Institutions and Serving with examples.
Household Sector(NPISH) • Explains the concepts of Gross Domestic
•Rest of the World (ROW) Product and Gross National Income on
market price.
• Different prices in estimating the value • States the composition of Factory
• Basic Price Industry Production Index (FIPI) of Sri
Lanka.
• Producer’s price
• Explains the concepts related to the
• Tax on products production approach.
• Subsidy on products
• Purchase’s price
•Wholesaler’s and retailer’s (Trade)
margins and transport charges
• Subsidy on consumer
• Tax on consumer

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Competency Competency Level Subject content Learning outcomes
Periods
• Gross Domestic Production on market price
/ Gross National Income
• Composition of Factory Industry
Production Index (FIPI)
• Concepts related to the output approach
• Value of the Gross Domestic Product
• On current price
• On constant (Fixed) price
• Deflator
• Gross Domestic Product and Net
Domestic Product
• Per - capita Gross Domestic Product
• Gross National Income
• Net National Income

30
 No. of
Competency Competency Level Subject content Learning outcomes
Periods
5.5 Inquires estimation of • Domestic income sources • Explains the domestic income sources
• Compensation of Employees 10
gross domestic product • Shows the components of gross domestic
• Net interest income in Sri Lanka.
using income approach
• Rent
and investigates related • Explains the concepts related to the
• Corporate profit
concepts. • Income from self-employment and income approach.
professionals/ Mixed income
• Components of the Gross Domestic
. Income in Sri Lanka
• Compensation of employees
• Gross operational surplus
• Net operational surplus
• Mixed income
• Consumption of fixed capital
• Other taxes and subsidies on production
• Gross Domestic Income on basic price
• Concepts relate to the income approach
• Primary Income
• Gross Domestic Income and Net
Domestic Income
• Gross National Income and Net
National Income
• Disposable National Income
• Household Income / Private Income
• Household Disposable Income
• Real National Income

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 No. of
Competency Competency Level Subject content Learning outcomes
Periods
5.6 Inquires the way of • Sources of Gross Domestic Expenditure • Explains the Gross Domestic
estimating the Gross •Household consumption expenditure Expenditure. 08
Domestic Product on • Gross Investment expenditure • Explains by naming out the components
expenditure approach • Government purchase of Gross Domestic Expenditure.
and the concepts • Gross Domestic Expenditure of Sri Lanka • Calculates the Gross Domestic
related. • Private Consumption Expenditure Expenditure.
• Government Consumption Expenditure • Calculates the Gross Domestic Product.
• Gross Domestic Capital Formation. • Calculates the Gross National Income.
• Gross Domestic Expenditure on Expenditure
• Explains the concepts relate to the
approach
expenditure approach.
• Gross Domestic Product on
.
Expenditure approach
• Gross National Income on Expenditure
approach
• Concepts related to the expenditure
approach
• Gross National Disposable Income on
market price
• Domestic Saving and National Saving
• Total Endowment of resource
and utilization of resource.

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 No. of
Competency Competency Level Subject content Learning outcomes
Periods
5.7 Analyses the • Importance of national accounting 08
• Explains the importance of national
importance and •Limitations of national accounting accounting.
limitations of national
• Green Gross Domestic Product • Presents the limitations of national
accounting.
accounting.
• Explains the concepts of Green Gross
Domestic Production with examples.

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Competency Competency Level Subject content Learning outcomes
Periods
6. Analysis the 35
determination 05
of macro 6.1 Analyses the macro • Macroeconomic equilibrium and
• Defines the macroeconomic equilibrium.
economic economic equilibrium disequilibrium
equilibrium. and disequilibrium. • Alternative approaches to present the macro • Defines the macroeconomic instability.
economic equilibrium
• Explains the alternative approaches to
•Aggregate Income = Aggregate
Expenditure (Y = E) approach present the macroeconomic equilibrium.
• Withdrawals = Injections
(W = J)approach
•Aggregate Demand = Aggregate Supply
(AD = AS) approach

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 No. of
Competency Competency Level Subject content Learning outcomes
Periods
6.2 Analyses the • Components of aggregate expenditure •Explains the components of aggregate 10
components of •Household consumption expenditure ( C ) expenditure.
• Consumption function • Defines the consumption function.
aggregate expenditure.
• Definition • Explains the autonomous consumption and
• Autonomous consumption and marginal propensity to consume with
Marginal propensity to consume consumption function.
• Graphical demonstration •Demonstrates the autonomous
• Relationship between household consumption and marginal propensity to
consumption and household saving consume with graphs.
• Saving function •Examines the relationship between
• Definition household consumption and household
• Dissaving and marginal propensity to saving with equations and graphs.
save • Defines the saving function.
• Average propensity to consume and • Explains the dissaving and marginal
average propensity to save propensity to save with saving function.
•Investment expenditure ( I ) •Demonstrates the dissaving and marginal
• Government purchases ( G ) propensity to save with graphs.
• Net exports NX / (X-M) • Examines the average propensity to
consume and average propensity to save
graphically.
• Introduces investment expenditure,
government purchase and net exports.
•Demonstrate the autonomous investment
expenditure and government expenditures
graphically.

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Competency Competency Level Subject content Learning outcomes
Periods
6.3 Analyses the macro- • Equilibrium income level •Presents the way of deciding the 10
•Aggregate income = Aggregate macroeconomic equilibrium through
economic equilibrium
expenditure approach aggregate income = aggregate
through different
•By schedules expenditure approach with schedules .
approaches • Presents the way of deciding the
•By graphs
macroeconomic equilibrium through
•By equations
aggregate income = aggregate
•Withdrawals = Injections approach
expenditure approach with graph.
•By schedules
• Presents the way of deciding the
• By graphs
macroeconomic equilibrium through
• By equations
aggregate income = aggregate
• The relationship between aggregate
expenditure approach with equation .
income = aggregate expenditure approach • Presents the way of deciding the
and withdrawals = injections approach macroeconomic equilibrium through
withdrawals = injections approach with
schedule.
• Presents the way of deciding the
macroeconomic equilibrium through
withdrawals = injections approach with
graph.
• Presents the way of deciding the
macroeconomic equilibrium through
withdrawals = injections approach with
equation .
• Demonstrates the relationship between
aggregate income = aggregate
expenditure approach and
withdrawals = injections approach by
schedule and the graphs.

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 No. of
Competency Competency Level Subject content Learning outcomes
Periods
6.4 Demonstrates the 10
• Change of the macroeconomic equilibrium. •·Explains the change of the
changes of macroeconomic macroeconomic equilibrium.
• Factors effecting for change in
equilibrium with the macroeconomic equilibrium •·Names out the factors affecting for a
changes of the components change in macroeconomic equilibrium.
of the aggregate demand • Changes of the types of autonomous
expenditures •·Present the way of changing the
through multiplier process.
•Autonomous consumption expenditure macroeconomic equilibrium on the
• Autonomous investment expenditure change of the types of autonomous
expenditure.
• Government expenditure
• Government tax •·Explains the way of changing the
macroeconomic equilibrium on the change
• Transfer
of consumption function.
• Change of the consumption function
• Change of the investment function •·Explains the way of changing the
macroeconomic equilibrium on the change
• Net export of investment function.
• Multiplier process(In simple economy)
•·Introduce the multiplier process in the
•By schedule macro economy.
•By equation
•·Analyses the multiplier process of the
• Investment multiplier economy with schedule and equation.
•Government expenditure
multiplier •·Explains the investment multiplier,
government expenditure multiplier, tax
• Tax multiplier multiplier transfer multiplier and balance
• Transfer multiplier budget multiplier numerically.
• Balance budget multiplier •·Describes the occasions that the
• The difference between the full equilibrium income on full employment
employment output level and output and beyond that. 300
equilibrium national income
.
37
 No. of
Competency Competency Level Subject content Learning outcomes
Periods
7. Investigates the 60
way of contribu- 7.1 Inquires money, types • Money • Defines money 08
tion of the bank- of money and functions • Definition • Explains the characteristics of money.
ing system to the of money. • Functions of money • Explains functions of money with
economic • Types of money examples.
activities by • Currency • Presents special characteristics of various
identifying the • Bank money types of money and provides examples.
behaviour of • Near money / Quasi money
money and • Money substitutes
general price • E-money
level.

7.2Inquires the reasons for • Money demand (Liquidity preference) • Defines money demand 08
money demand and the • Definition • Presents the reasons for money demand.
factors affecting to • The reasons for money demand • Analyses the reasons for money demand
determines the money • Transactionary motive with graphs.
demand. • Precautionary motive • Analyses the factors that determine
• Speculative motive
• The factors affecting to money demand

38
 No. of
Competency Competency Level Subject content Learning
money demand.outcomes Periods

10
7.3 Presents money • Money supply.
supply analytically. • Definition
• Definition on monetary aggregates • Defines money supply.
• M1 -Narrow money supply • Lists out the definitions for types of
• M2 -Broad money supply money supply in an order.
• M2b- Consolidated broad money • Analyses the types of definitions for
supply money supply.
•M4 -Monetary aggregate • Presents the factors that determine
(No need of statistical data knowledge) money supply.
• Base money • Analyses the factors that determine the
• Components and determinants base money.
• Money multiplier • Analyses the base money on assets and
• Relationship between base money and liabilities of the Central Bank.
money multiplier • Defines money multiplier.
• Analyses the relationship between
money multiplier and base money with
an equation.

39
 No. of
Competency Competency Level Subject content Learning outcomes
Periods

7.4 Analyses • Concepts related to price level • Defines the general price level
concepts related to • Inflation • Explains the concepts related to 10
price level, theory • Deflation general price level
and measures.
• Disinflation • Analyses reasons for inflation with
• Theoretical approaches of inflation various approaches.
• Demand pull inflation • Examines economic consequences of
• Quantity theory of money inflation.
• Keynesian theory • Explains steps to control inflation.
• Cost push inflation • Introduces the various price indices
• Effects of Inflation currently used to measure change of
• General price level in Sri Lanka general price level in Sri Lanka.
• Introduction of price indices • Examines recent trends in general price
• Price indices currently used in Sri Lanka level of Sri Lanka using the above
indices.

7.5 Inquires the

• Financial system of Sri Lanka • Defines the financial system. 08
functions of financial
• Definition • Analyses the components of financial
system in Sri Lanka.
• Components system of Sri Lanka.
• Financial institutions
• Financial market
• Financial instruments
• Financial infrastructure
• Regulatory bodies to monitor the
financial institutions

40
 No. of
Competency Competency Level Subject content Learning outcomes
Periods

08
7.6 Inquires the • Central Bank of Sri Lanka (CBSL) • Defines the Central Bank of Sri Lanka.
objectives and functions • Objectives •Analyses the objectives of Central Bank of
of the Central Bank of • Functions Sri Lanka.
Sri Lanka. • Monetary policy •States the functions of Central Bank of Sri
• Monetary policy instrument Lanka.
• Instrument of monetary policy •Defines the finance policy.
• Analyses the financial policy tools by
naming out them.

41
 No. of
Competency Competency Level Subject content Learning outcomes
Periods

• Defines a Commercial bank 08

7.7 Inquires the • Commercial Banks
• Explains the main objectives of a
functions of the • Introduction
Commercial Bank. 10
Commercial Bank. • Objectives
• Explains the problems that occur when
• Functions
achieving objectives of Commercial
• Balance sheet
Bank.
• Money creation
• Explains the functions of a commercial
Bank
• Presents the balance sheet of a Commer-
cial Bank
• Presents assets structure of a commercial
bank analytically.
• Explains the money creations of a
Commercial Bank through the balance
sheet.

42
 No. of
Competency Competency Level Subject content Learning outcomes
Periods
8. Investigates 65
government 8.1 Inquires reasons for • Market Failure • Defines market failure. 08
intervention to market failure. • Introduction • Explains the reasons for market failures.
achieve macro • Reasons • Explains inefficient allocation of resources.
economic • Inefficient allocation of resources. • Explains macro economic instability.
objectives. • Non provision of public goods. • Explains Income Distribution Disparities.
• Non consideration of externalities.
• Imperfect competitions and monopoly
imperfect information.
• Over utilization of resources
• None provision of merit goods
optimally
• Non consumption semi public
goods optimally.
• Supplying of demerit goods.
• Macro economic instability.
• Income distribution disparities

43
 No. of
Competency Competency Level Subject content Learning outcomes
Periods

• Externalities 07
8.2Examines effects of • Defines externalities
the externalities for • Definition • Names sources of externalities
market failure. • Externalities of Production • States positive and negative sources of
• Externalities of Consumption externalities separately and presents the
• Market failure due to externalities examples.
• Policy procedures to rectify market failure • Graphically explains the way of fail the
occurs due to externalities. market due to externalities.
• Presents proposals to prevent market
failures due to externalities.

08
• Functions of a Government within a
8.3Investigates the market economy • Introduces government functions of a
functions of • Efficient allocation of resources market economy.
Government in a • Equal distribution of income and • Explains functions of the government in a
market economy. wealth market economy with examples.
• M acro Economic stability • Explains government failures in fulfilling
• Sustainable Development the functions of a market economy.
• Regulation • Presents the reasons for the government
• Government failures failures in market economy.
• Definitions
• Reasons

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 No. of
Competency Competency Level Subject content Learning outcomes
Periods
8.4 Analyses Government • Fiscal Policy • Defines Government Fiscal Policy.
10
revenue in Sri Lanka by • Definition • Explains the objectives of Fiscal
examines the tax • Objectives Policy
• Government Revenue • Names out the instruments of Fiscal
principles and tax
Policy
classification. • Tax Revenue
• Names out the main sources of
• Objectives of imposing taxes
government revenue.
• Principles of taxation
• Explains the objectives of imposing the
• Classification of taxation tax.
• Shifting the tax burden and tax • Explains the principles of taxation.
incidence • Classifies the taxes on different criteria.
• Economic effects of Tax system • Explains concepts of transferring tax
• Non tax revenue burden and tax incidence.
• Recent trends in government • Investigates the economic consequences
revenue in Sri Lanka of taxation.
• Shows components of non tax revenue in
Sri Lanka.
• Examines recent trends of tax revenue in
Sri Lanka.
(Using Central Bank Report)

45
 No. of
Competency Competency Level Subject content Learning outcomes
Periods

8.5 Analyses the 08

• Government expenditure. • Explains the reasons for government
composition of
• Reasons for government expenditure. expenditure.
Government
• Classification of government • Classifies government expenditure based
Expenditure and its
expenditure. on economic classification.
recent trends.
• Economic classification. • Explains the components of economic
• Recent trends in government classification.
expenditure. • Examines composition of government
expenditure and its trends based on
Central Bank Report.
• Explains economic consequences of
government expenditure.

46
 No. of
Competency Competency Level Subject content Learning outcomes
Periods

08

• Government budget of Sri Lanka • Defines government budget.

8.6Analyses the nature of
• Definition • Presents deficit, surplus and balanced
Government Budget and
• Deficit, surplus and balanced budgets. budgets.
budgetary policy.
• Structure • Presents structure of government budget.
• Explains the importance of the surplus in
• Current account balance.
current account.
• Primary account balance.
• Explains primary account balance.
• Overall balance.
• Explains the differences between Sri
• Net cash deficit.
Lankan’s net cash deficit and overall
• Government budgetary policy.
balance.
• Expansionary budgetary policy.
• Explains expansionary government
• Contractionary budgetary policy.
budgetary policies.
• Economic consequences of government
• Explains contractionary government
budgetary policy.
budgetary policies.

47
 No. of
Competency Competency Level Subject content Learning outcomes
Periods

8.7 Inquires financing 08

• Financing government budget deficit. • Explains the consequences of domestic
budget deficit and • Domestic sources and its and foreign financing sources of budget
composition of consequences. deficit.
government debt. • Foreign sources and its • Presents the composition of government
consequences. debt.
• Government debt in Sri Lanka. • Presents recent trends in government
• Composition debt in Sri Lanka by using the central
• Consequences bank sources.
• Describes problems that arise with
domestic debt sources.
• Analyses consequences of increase in
government debt.

• Defines supply side economic policies. 08

8.8Inquires supply • Supply Promotion Policies.
• Names the instruments of supply side
promotion policies and • Introduction
economic policies.
steps related to • Steps associated in Sri Lanka.
• Explains with examples, how supply
Sri Lanka. • Economic consequences.
promotions policies are implemented in
Sri Lanka.

48
 No. of
Competency Competency Level Subject content Learning outcomes
Periods
9. Explores 40
international trade 9.1 Investigates the basis of
• International Trade 10
influences on Sri International trade. • Defines International Trade.
• Definition
Lankan economy • Defines The Theory of Absolute
• Theories of International Trade
by analysing the Advantage.
• The Theory of Absolute Advantage
theoretical basis • Explains with statistical examples how
• The Theory of Comparative
of International each country receive Absolute
Advantage
trade. Advantages.
• Assumptions of Comparative
• States the reasons for Absolute
Advantage Theory
Advantage.
• Internal exchange rate
• Defines The Theory of Comparative
• External exchange rate
Advantage.
• Sources of Comparative Advantage
• States assumptions of The Theory of
•The Advantages of Competitiveness
Comparative Advantage.
•Gains of international trade
• Explains with statistical examples how the
• Static a gains
comparative advantages are gained.
• Dynamic gains
• Explains internal exchange rate.
• Calculates external exchange rate to enter
international trade to achieve mutually
beneficial gains.
• States the sources (reasons) for the
comparative advantage.
• Explains the advantages of
competitiveness for International Trade.
• Explains the static and dynamic gains of
International Trade.
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 No. of
Competency Competency Level Subject content Learning outcomes
Periods

9.2Analyses • Defines protectionism.

Protectionist • States the protectionist strategies 06
• Protectionism
policies and its impact separately.
•Definition`
on Free trade. • Explains the tariff protection.
• Protectionist strategies
• Explains the nominal rate of protection
• Tariffs and effective rate of protection.
• Nominal Protection • States the Non-tariff protectionist
• Effective Protection strategies.
• Non Tariff trade barriers. • Presents the arguments for and against
• Argument s for and against protectionism the protectionism.

50
 No. of
Competency Competency Level Subject content Learning outcomes
Periods

9.3 Analyses reasons for • Terms of Trade • Defines the Terms of Trade. 08
change and • Commodity Terms of Trade • Names out the types of Terms of Trade.
consequences of • Definition • Expresses the Commodity Terms of
foreign Terms of Trade, • Calculation Trade with equation.
while stating the types. • Changes and its reasons • Calculates Commodity Terms of Trade
• Consequences with given data.
• Income Terms of Trade • Explains reasons for changes in
• Definition Commodity Terms of Trade.
• Calculation • Explains economic consequences in
• Consequences changes of Commodity Terms of
Trade.
• Expresses the Income Terms of Trade
by equation.
• Calculates Income Terms of Trade with
given data.
• Explains economic consequences of
Income Terms of Trade.

51
 No. of
Competency Competency Level Subject content Learning outcomes
Periods

9.4 Inquires globalization, • World Trade Organization (WTO) • Explains objectives of World Trade 08
regionalization and •Objectives
Organization.
bilateral . •Functions • Describes functions of World trade
•Globalization organization.
•Definition • Defines Globalization.
•Arguments for and against to the • Presents the arguments for and against
globalization globalization.
• Economic Integrations • Defines Economic Integrations.
• Trade agreements • Describes recent trade agreements
• Bilateral trade agreements with Sri Lanka.
• Explains importance of foreign trade
• Present trade agreement with
agreements
Sri Lanka.
• Provides examples for bilateral trade
• Multilateral trade agreements agreements.
• Present trade agreements with • Provides examples for multilateral trade
agreements.
Sri Lanka.

52
 No. of
Competency Competency Level Subject content Learning outcomes
Periods
9.5 Investigates the nature • Exports of Sri Lanka • Explains export trade in Sri Lanka 08
of foreign trade and • Export structure • Explains export structure in Sri Lanka.
foreign trade polices in • Trends • Explains import trade in Sri Lanka.
Sri Lanka. • Imports of Sri Lanka • Explains import structure in Sri Lanka with
• Imports structure data from Central Bank Report.
• Trends • Explains the trends of import in Sri Lanka
• Foreign trade polices with data from Central Bank Report.
• Present foreign trade polices • Explains foreign trade polices in Sri Lanka
• Problems and solutions for with recent information.
export trade • Explains the problems of export trade.
• Presents the problems and solutions for
export trade.

53
 No. of
Competency Competency Level Subject content Learning outcomes
Periods
10.Explores foreign 45
finance affects the 10.1 Analyses items of •Balance of Payments • Defines balance of payment.
Sri Lankan Balance of Payments. • Definition • Explains the components of Balance of
05
economy. • Components Payments with examples.
• Current Account • Prepares a Balance of Payment using
• Capital Account hypothetical data.
• Financial Account • Presents the recent format of Balance of
Payment statement with Central Bank
Report.

06
10.2 Proposes strategies • Recent trends in Balance of Payments in • Explains recent trends in Balance of
and solutions for the Sri Lanka. Payment in Sri Lanka by with central
imbalances of Balance of • Deficit in current account balance . bank annual report.
Payments in Sri Lanka • Solutions for Balance of payment • Explains the current account deficit in
while recognizing them. imbalances. Balance of Payments.
• Short term • Proposes short term solutions to correct
• Long term imbalances of Balance of Payment.
• Proposes long term solutions, to correct
continuous deficit in Balance of
Payments.

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 No. of
Competency Competency Level Subject content Learning outcomes
Periods

10.3 Analyses the • Foreign Resources Gap. • Defines Foreign Resource Gap. 06
• Definition and calculations • Calculates a Foreign Resource Gap with
foreign resources gap
• Recent trends
and change of import hypothetical data.
• Way of financing and its consequences.
possibility of foreign • Explains how the Foreign Resource Gap
• Measure the relative quantity of foreign
assets resource gap. settled recently, with data of Central Bank
• Foreign Assets. report.
• Definition • Defines Foreign Assets.
• Composition • Presents composition of Foreign assets.
• Importance • Explains the importance of maintaining
• Measuring relative quantity foreign assets.
• Import possibility of foreign assets.
• Explains the measuring of relative quantity
of Foreign Assets and it’s recent quantity
by using the central bank annual report
• Expresses for how long import
possibility of foreign assets are sufficient.

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 No. of
Competency Competency Level Subject content Learning outcomes
Periods
10.4 Investigates how • Types of Foreign investments • Defines Foreign Investments. 04
foreign investments • Direct Investments • Classifies foreign investments.
affect a the economy of • Introduction • Describes foreign direct investments and
a country. • Trends states recent trends.
• Portfolio investments
• Analyses favourable effects and
• Introduction
unfavourable effects of foreign direct
• Trends
investments.
• Identifies Portfolio investments and
analyses it’s recent trends.

10.5 Analyses the

• Foreign Exchange Market • Defines Foreign Exchange Market 04
determination of
• Definition • Defines Foreign Exchange Rate.
Foreign Exchange
• Foreign Exchange Rate • Explains the determination of Foreign
Rate.
• Definition Exchange Rate systems.
• Price Quotation (Direct Quotation)
• Quantity Quotation (Indirect
Quotation)
• Determination of Foreign Exchange Rate
• Demand for Foreign Exchange Rate
• Supply of Foreign Exchange Rate

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 No. of
Competency Competency Level Subject content Learning outcomes
Periods
• Introduces Fixed Exchange Rate Systems
10.6 Comparatively • Types of Foreign Exchange Rate Systems and states its advantages and 06
analyses of Foreign (Regimes). disadvantages.
Exchange Rate Systems. • Fixed Exchange Rate System • Introduces Floating Exchange Rate
• Introduction System and states its advantages and
• Advantages / Disadvantages
disadvantages.
• Floating Exchange Rate System
• Introduces Managed Floating Exchange
• Introduction
Rate System.
• Advantages/Disadvantages
• Managed Floating Exchange rate system • Explains the difference between Nominal
• Introduction Effective Exchange Rate and Real
• Nominal Effective Exchange Rate (NEER) Effective Exchange Rate.
and Real Effective Exchange Rate(REER). • Defines and compute Real Exchange
• Definition Rate.
• Importance • Defines Purchasing Power Parity
• Real Exchange Rate. Exchange Rate.
• Definition and Formula
• Explains the Purchasing Power Parity
• Purchasing Power Parity Exchange Rate.
Exchange Rate with examples.
• Definition
• Explains the importance of Purchasing
• Formula and Importance
Power Parity Exchange Rate.

57
 No. of
Competency Competency Level Subject content Learning outcomes
Periods
10.7 Analyses the changes • Changes of Foreign Exchange Rate. • Illustrates the ways of change of 06
of Foreign Exchange • Devaluation and Depreciation Exchange Rate.
Rate and its • Defines devaluation of Exchange Rate
• Definition
consequences.
• Consequences and depreciation.
• Revaluation and Appreciation • Analyses the consequences of
• Definition devaluation, using examples.
• Consequences • Defines Revaluation and appreciation of
exchange rate.
• Conditions should be fulfiled to achieve
• Analyses the consequences of
the expected targets of devaluation or revaluation of exchange rate, using
depreciation. examples.
• Explains the conditions should be fulfilled
to achieve the expected targets of
devaluation or depreciation
• Multilateral Financial Institutions. 06
10.8 Inquires the functions
• International Monetary Fund (I.M.F.) • Names Multilateral Financial
of Multilateral Financial
• Objectives Institutions.
Institutions.
• Functions • Illustrates objectives of International
• World Bank (IBRD) Monetary Fund.
• Objectives • Explains functions of International
• Functions Monetary Fund.
• Illustrates objectives of World Bank.
• Explains the functions of World Bank.
• Examines recent changes of the World
Bank.

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 No. of
Competency Competency Level Subject content Learning outcomes
Periods
11.Exhibits the 11.1 Analyses factors of • Economic growth • Defines economic growth. 70
interest of economic growth by • Definition • Explains the way of mesuring economic.
contribution to realizing the • Measures • Shows the determinants of economic
sustainable importance of • Determinants growth.
development by economic growth. • Importance • Explains the importance of economic
06
analyzing the • Cost growth.
diversity of • New concepts related to economic • Explains cost of economic growth with
development. growth. examples.
• Recent growth trends in Sri Lanka. • Explains recent trends of economic
• Common characteristics of countries which growth in Sri Lanka.
attained Economic growth process. • Explains the common characteristics of
the countries which attained economic
growth process.

59
 No. of
Competency Competency Level Subject content Learning outcomes
Periods
11.2 Analyses various • Economic development • Defines economic development.
concepts related to • Definition • Explains the changes in the economic
development. • Structural changes in the economy with structure with economic development
economic development. process.
• Development. • Defines concept of development.
• Definition • Analyses aspects of development.
• Development aspects • Distinguishes between economic growth
• Human development and development.
• Definition • Explains the aspects of human
• Aspects development.
• Sustainable development • Defines human development.
• Definition • Defines sustainable development.
• Aspects • Analyses aspects of sustainable
• New trends related to development development.
• Explains new trends related to
development..

60
 No. of
Competency Competency Level Subject content Learning outcomes
Periods

11.3Investigates the • The indices to measure the development • List out the economic indices to
• Per Capita Income measure development. 08
composite indices by
listing out the indices • Marginal measures • Express the importance and weakness
used to measure the • World Bank economic classifications. of economic indices to measure
development. • Composite Indices development.
• Human Development Index • Presents the World Bank classification of
• Happiness Index countries based on Per Capita Income.
• Names the composite Indices to mea-
sure development.
• Introduces the Human Development
Index
• Names the components used to
construct Human Development Index.
• Exhibits the classification of countries
following to Human Development Index.
• Shows strengths s and weakness of
Human Development Index.
• Express progress obtained by Sri
Lanka in Human Development.
• Defines income distribution inequalities.
• Introduces Happiness Index

• Explains its the components of it.

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 No. of
Competency Competency Level Subject content Learning outcomes
Periods
• Income inequalities • Define income distribution inequalities
11.4Examines standard
• Definition • Explains absolute and relative income
methods to measure 08
• Nature of income distribution distribution with definition.
income inequalities.
• Absolute income distribution • Explains various measures using to
• Relative income distribution measure income inequalities.
• House hold income and expenditure • Constructs Lawrence Curve.
distribution. • Computes Gini Coefficient.
• Measures of income inequalities • Describes Quintile Dispersion Ratio.
• Lawrence Curve
• Gini co Coefficient
• Quintile Dispersion Ratio

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 No. of
Competency Competency Level Subject content Learning outcomes
Periods
11.5 States the way of • Concept of Poverty • Defines concept. of poverty
measuring Poverty by • Definition • Names different/various measures to
08
analyzing the concept of • Poverty measures measure poverty.
Poverty . • National Poverty Line • Explains National Poverty Line.
• Population Poverty Index • Explains Population Poverty Index.
• International Poverty Line • Explains International Poverty Line.
• Other Poverty Indices. • Comparatively analyses Poverty among
• Forms of Poverty countries using measures of poverty.
• Absolute Poverty • Introduce two natures of poverty.
• Relative Poverty
• Aspects
• Consumption Poverty
(Income Poverty)
• Humans Poverty

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 No. of
Competency Competency Level Subject content Learning outcomes
Periods
11.6 Investigates poverty in • Poverty in Sri Lanka. • Introduces poverty level in Sri Lanka.
Sri Lanka. • National Poverty Level. • Presents the reasons for regional changes
• Sectorial and Regional changes. of the poverty in Sri Lanka. 06
• Reasons for poverty • Presents reasons for poverty in Sri
• Steps taken to reduce poverty. Lanka.
• Proposes steps to minimize poverty in
Sri Lanka.

11.7Analyses changes of • Population. • Introduces population growth and its

population distribution • Population growth and determinants of it. determinants. 08
and its effects in • Natural growth. • Computes natural growth rate of
Sri Lanka. • Net migration. population and net migration ratio.
• Changes of population distribution and • Analyses changes of population
its effects. distribution and its economic conse-
quences.
• Examines the changes of age structure
and it’s consequences.
• Explains sectorial distribution of
population in Sri Lanka.
• Explains the demographic transition with
definition .
• Defines dependency ratios in Sri Lanka.
• Calculates dependency ratios in Sri
Lanka.

64
 No. of
Competency Competency Level Subject content Learning outcomes
Periods
11.8 Analyses Labour • Labour Force. • Defines Labour Force. 08
Force in Sri Lanka and • Definition • Computes Labour Force using
the ways of computing. • Calculations hypothetical statistical data.
• Working age population • Explains the difference between working
• Labour Force Participations Rate age population and Labour Force.
• Characteristics of Labour Force in Sri • Calculates Labour Force Participation
Lanka Rate.
• Explains characteristics of Labour Force
in Sri Lanka.

11.9 Inquires structural • Employment. • Defines employment.

changes of employment • Definition • States characteristics of employment in
and unemployment in • Structure Sri Lanka.
• Calculates employment rate. 08
Sri Lanka. • Employment rate
• Under employment. • Investigates employment rate and its
• Definition changes in Sri Lanka.
• Reasons • Defines under employment.
• Consequences • Illustrates reasons and consequences of
• Un employment under employment in Sri Lanka.
• Definition • Defines unemployment.
• Explains unemployment rate in Sri Lanka
• Reasons
and its changes.
• Consequences
• Presents reasons for unemployment in Sri
Lanka.
• Explains socio-economic consequences
of unemployment.
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 No. of
Competency Competency Level Subject content Learning outcomes
Periods
12. Comparatively 20
investigates • The changes after the independence of Sri • Explain the changes after the
economic 12.1 Investigates the
changes after the Lanka independence of Sri Lanka.
structure and 08
independence of • Economic policy changes • Names out the basic characteristics of
the economic
Sri Lanka. • Import substitution and industrial policies import substitution industrial policies.
policies of
Sri Lanka. • Introduction • Explains the basic characteristics of
industrial policies.
• Characteristics
• Explains the of effects of the import
• Effects
substitution policies over the economy.
• Export oriented industrial policy and
• Explains the effects of industrial policies
liberalization policy over the economy.
• Introduction • Defines the export oriented industrial
• Characteristics policy and liberalization policy.
• Explain the basic characteristics of export
• Effects
oriented industrial policies and
liberalization policies.
• Investigates the effects of export oriented
industrial policies and liberalization
policies to the economy.

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 No. of
Competency Competency Level Subject content Learning outcomes
Periods
12.2 Explores the new • New trends of Sri Lankan economy • Explains the structural changes of Sri
trends of Sri Lanka Lankan economy by using recent data.
• Changes arisen in economic structure 08
economy.
• Production • Analyses employment, foreign
employment remittances, infrastructure
• Employment
development, tourism industry and rural
• Foreign employment and remittance development with recent data.
• Infrastructure development • Explains the factors affecting to increase
•Tourism industry or decrease the employment.
• Knowledge economy • Analyses the new trends in tourism
•Regional development industry.
• Explains the importance of regional
development.
• Describes factor s affecting regional
development disparities.

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 No. of
Competency Competency Level Subject content Learning outcomes
Periods

12.3 . Inquires the • Contemporary economic issues • Explains the ways of affecting the 04
contemporary domestic and global issues over the
• Domestic
economic issues and economy.
• Economic challenges and problems
policies.
• Global • States the examples for domestic and
• Contemporary economic policies global issues.
• Explains the factors affecting domestic and
global issues.
• Explains the contemporary economic
policies.

300

68
7.0 School Policies and Programmes

The Economics syllabus comprises 12 competencies and 83 competency levels. It is expected to provide all these competency levels to the student
through a student centered learning - teaching process. The learning outcomes that should be achieved by the student, under each competency level,
are given separately.

Normally, 420 periods are assigned for this subject, in the school time-table, but the present syllabus is planned only for 300 periods a year.
Accordingly, the syllabus has been prepared so as to provide 60experiences.0 periods per year, for Grade 12 and 13. However this syllabus has
been planned with a fewer number of periods than the expected number of periods, for a year. These extra periods can be utilized for the purposes
of school based assessment related activities. Hence it is expected that the students would be given opportunities to enrich their learning

In approaching the learning outcomes under each competency level, it is expected that the learning-teaching process will be well planned to ensure
that students achieve concepts based on practical experiences. For this purpose the student should be facilitated in highlighting inborn talent through
co-curricular programmes.

The policy and programmes implemented in the school contribute much in the successful implementation of this syllabus. Several school policies and
programmes that can be easily implemented in the school are given below

 Make student thinking in an economics way.

 Study the role of market forces by organizing a market.
 Organize discussions and seminars to bring social experience related to the subject to the class room.
 Carry out a simple project appropriate to the subject of economics and prepare a report.
 Set up economics associations
Conduct an economics day.

69
  Organize field trips to observe and study the places such as economics centers, share market etc.
 Making of relevant dramas to display a person's economic behaviour.
 Maintain a collection of subject related articles published in magazines and newspapers.
 Directing the students to maintain school canteen, co-op society and the school's bank.
 Guide students to maintain a wall paper and a magazine related to global economics trends.
 Conduct competitions debates discussions and conferences.
 Collect information related to words economic trends using internet.
 Make students aware of contemporary economic issues.

It is proposed, that for the purpose of equipping students with experience in Economics and the school community through programms of a specific
nature for the purpose of preparation and implementation of programmes and policy, committees comprising students, teachers, sectional heads and
school principals, and if necessary, parents, should be set up. It is better to decide on the future programs and policies which are expected to be
implemented parallel to A/L economics and amalgamate them to the school annual plan. In these events, it is necessary to incorporate the needs of
stakeholders of education, parents and students and government polices. It is necessary to implement a proper study of the relationship among
resources, funds, school and the community.

8.0 Assessment and Evaluation

Under the School Based Assessment and Evaluation procedure, it is expected that assessment instrument should be prepared creatively to cover
competencies levels prescribed for each them.

This syllabus is prescribed for the G.. C. E.(A/L) examination which is the National Level evaluation at the end of Grade 13. The National Level
examination based on this syllabus conducted by the Examinations Department of Sri Lanka, based on the syllabus, will be held d for the first time in
2019. The structure and the nature of the questions paper of this examination will be provided by the Department of Examination.

70