Economic activity within a country will reflect the overall health of that country's economy. An economy will experience cycles of prosperity, recession and recovery that are measured and predicted by economists, and these activity swings will have an effect on the well-being of industries and corporations. The current economic climate of a particular country, whether in North America or in other regions around the world, will have a great effect on global markets in general and domestic markets in particular. At a microeconomic level, the fundamental units of economics, supply and demand, are quantitatively described and used to predict and explain market trends.

A host of complex, interacting monetary factors - business cycles, Federal Reserve Board decisions, increases or decreases in the monetary supply, and so on - combine with industry-specific earnings and output to determine the overall economic health of a country and, ultimately, securities pricing and trading. This section examines a number of these factors.



Price Changes in the Economy

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