Market trends are shaped by larger economic factors. Here are four such factors every investor should understand.The first is government influence. By increasing or decreasing interest rates, the government and Federal Reserve can slow or accelerate growth. This is called monetary policy. Increasing or contracting spending -- fiscal policy -- can ease unemployment and stabilize prices. Second is internal transactions. The more money that leaves a country, the weaker that country’s economy and currency becomes. Countries that export more than they import keep their economies strong. Third is speculation and expectation. The direction that consumers, investors and politicians believe the economy is headed impacts how we act today. Sentiment indicators gauge what certain groups think the economy is doing. And fourth is supply and demand for products, currencies and other investments. Items in demand with shrinking supplies will see their prices rise; if supply outpaces demand, prices will fall. While each factor is different, they are linked. Government mandates impact international transactions, which influences speculation. If a government wants to change spending or tax policy, or the Fed wants to change interest rates, long-term trends will be impacted. A country’s balance of payments and the strength of its currency influences market trends. If a country’s currency is weak, it will deter investors and deplete profits. Finally, supply and demand has a similar dynamic on all markets. The threat of supply drying up at current prices makes buyers buy at higher prices, creating price increases. If a large group of sellers enter a market, supply will go up and prices will fall.