Economics: Consumer Rights and Global Economic Principles

This set of vocabulary flashcards covers essential economic concepts including Swedish consumer laws, macroeconomic policies, market theories, and economic indicators like GDP and inflation.

Consumer Sales Act (Konsumentköplagen)

A Swedish law providing the right to complain if a product is faulty, usually within $3$ years.

Distance Contracts Act (Distansavtalslagen)

A law in Sweden granting the right to return goods bought online within $14$ days.

The Phillips Curve

A model illustrating the relationship between inflation and unemployment, suggesting that when inflation is high, unemployment tends to be low, and vice versa.

Fiscal Policy

Economic management controlled by the government that changes spending and taxes to influence demand and growth.

Monetary Policy

Economic management controlled by the central bank (Riksbank in Sweden) that changes interest rates and money supply to control inflation and growth.

Demand-pull Inflation

Inflation that occurs when the demand for goods and services exceeds the available supply.

Cost-push Inflation

Inflation caused by rising production costs, such as higher wages, raw materials, or energy prices.

Economics

The social science that studies the production, distribution, and consumption of goods and services.

Factors of Production

The three resources used for production: natural resources, labour, and capital (equipment).

Real Flow

The movement of physical goods, services, and factors of production between households and firms.

Monetary Flow

The movement of money (wages, rent, payments) between households and firms in the opposite direction of the real flow.

Freedom of Industry

The principle that individuals are free to start businesses and decide what goods or services to produce.

The Invisible Hand

Adam Smith's concept that individuals acting in their own self-interest indirectly help the whole economy function through the price mechanism.

Division of Labour

Also called specialisation, it is the idea that production is divided into different tasks to increase productivity and efficiency.

Economies of Scale

A situation where large companies produce in bulk, allowing them to lower the cost per unit of goods.

Public Goods

Services like national defense or public infrastructure that benefit everyone and are usually provided by the government because they are not profitable for private competition.

GDP (Gross Domestic Product)

The total value of all completed goods and services produced in a country in one year.

Human Development Index (HDI)

A measurement used to complement GDP that tracks income, education, and life expectancy.

Big Mac Index

An economic tool used to compare the purchasing power between different countries.

Consumer Price Index (CPI)

The metric used in Sweden to measure inflation, currently targeting around $2\%$.

Imported Inflation

Inflation that occurs when imported goods become more expensive due to international price increases or changes in currency value.

Structural Unemployment

Unemployment resulting from technology or outsourcing replacing specific labor needs.

Frictional Unemployment

The natural delay or period of unemployment that occurs when an individual is transitioning between jobs.

Business Cycle

The natural fluctuation of the economy between periods of growth (booms) and periods of contraction (busts).

Factor Market

A market where households provide labor, land, or capital to firms in exchange for income.