IAI CB1 study guide
IAI CB1 · Work through your exam, one topic at a time.
CB1 (Business Economics) is one of the Core Principles subjects in the examination structure of the Institute of Actuaries of India (IAI). IAI is a statutory body established under The Actuaries Act 2006 (35 of 2006) for regulation of the profession of actuaries in India; the provisions of that Act came into force on 10 November 2006 under a Government of India notification dated 8 November 2006 issued by the Ministry of Finance, Department of Economic Affairs. The IAI CB1 study guide has 7 sections and about 2,472 words.
01Economic models and the economic problem
This domain tests whether you can build, manipulate and criticise simple models. CB1 asks you to state the assumptions, derive a result, and say when the result breaks - not to recite definitions.
378 words, about 2 min02Microeconomics: consumer and firm behaviour
This domain tests the neoclassical toolkit behind demand curves and supply decisions, and the informational frictions that complicate them. Preferences need completeness, transitivity and monotonicity.
365 words, about 2 min03Market structures, competition and pricing
This domain tests the spectrum from perfect competition to monopoly, the strategic interaction of oligopolists, and how regulators price natural monopolies. Perfect competition: many firms, homogeneous product, free entry.
366 words, about 2 min04Macroeconomics and macroeconomic policy
This domain tests national income accounting, aggregate demand and supply, the transmission of policy, and the constraints that stop stimulus from working as intended. GDP by expenditure is C + I + G + (X − M).
346 words, about 2 min05International economics
This domain tests comparative advantage, balance-of-payments accounting, exchange-rate determination, and how openness changes the power of domestic policy. Absolute advantage compares productivity; comparative advantage compares opportunity cost.
363 words, about 2 min06Financial markets
This domain tests the instruments, pricing relationships and informational features of financial markets, and why intermediaries exist despite creating risk. Money markets are short-dated (Treasury bills, certificates of deposit, commercial paper); capital markets cover bonds and equities.
339 words, about 2 min07The macro-financial environment
This domain tests the two-way link between the real economy and the financial system, and what that implies for insurers, pension funds and regulators. The financial cycle amplifies the business cycle.
315 words, about 2 min