Ultimate Stocks & Forex Trading Course: [Lesson 7] Long Run Aggregate Supply
Stocks & Forex Trading Course: [Lesson 7] Long Run Aggregate Supply
Full 100 video Stocks & Forex Trading Course available for FREE at https://www.getmetrading.com
Lesson 7 of 100 - Macro Fundamental Analysis Module (Macroeconomics)
Lesson Spreadsheet Download: https://getmetrading.com/
(HD Financial Education Course)
This 100 video Stocks & Forex Trading Course is designed to provide traders and investors with everything they need to know to navigate the financial markets like a Professional trader and investor.
The Stocks & Forex Course is structured in four key parts to provide a complete financial education. The four key areas covered in this Course are:
1) Macro Fundamental Analysis (Lessons 1 to 59)
2) Fundamental Analysis of Stocks & Companies (Lessons 60 to 72)
3) Price Action & Technical Analysis (Lessons 73 to 83)
4) Advanced Risk Management Principles (Lessons 84 to 100)
Lesson 7 Overview:
In this lesson you will learn how the Long Run Aggregate Supply Curve represents the Natural Rate of Unemployment in an economy and how deviations to the left and to the right of the Long Run Aggregate Supply Curve represent temporary and unsustainable levels of output which cause either an Inflationary Gap (Positive Output Gap) or a Deflationary Gap (Negative Output Gap).
When an economy is operating at the Natural Rate of Unemployment the economy is considered to be running at Full Employment.
Note that Full Employment is not 0% Unemployment. This is a common misconception and when Monetary Authorities take policy stances to move the economy towards Full Employment, this means they are looking to achieve the Natural Rate of Unemployment. In the US this tends to fluctuate between 4-5% Unemployment.
We will discuss the concept of Unemployment & the Natural Rate of Unemployment in future videos in this Stocks & Forex Course.
STOCKS & FOREX MARKET DIRECTION KEY
When an economy is operating to the Right of the Long Run Aggregate Supply Curve due to a shift in the Aggregate Demand Curve:
This reflects a period of Inflation / Reflation in an economy & the domestic currency falls on the Forex market whilst domestic Stocks tend to rise as GDP increases.
When an economy is operating to the Right of the Long Run Aggregate Supply Curve due to a shift in the Aggregate Supply Curve:
This reflects a Goldilocks economy & the domestic currency rises on the Forex market whilst domestic Stocks tend to rise also as GDP increases.
When an economy is operating to the Left of the Long Run Aggregate Supply Curve due to a shift in the Short Run Aggregate Supply Curve:
This reflects a period of Deflation in an economy & the domestic currency rises on the Forex market whilst domestic Stocks tend to fall as GDP decreases.
When an economy is operating to the Left of the Long Run Aggregate Supply Curve due to a shift in the Short Run Aggregate Supply Curve:
This reflects a period of Stagflation in an economy & the domestic currency falls on the Forex market whilst domestic Stocks tend to fall also as GDP decreases.
Video Times:
00:07 - Why the Long Run Aggregate Supply Curve is vertical
01:08 - How the Long Run Aggregate Supply Curve relates to the Central Bank mandate of Full Employment & the Natural Rate of Unemployment
04:37 - How the Long Run Aggregate Supply Curve relates to the Business Cycle
05:59 - The difference between sustainable & unsustainable levels of economic output
10:52 - Factors which shift the Long Run Aggregate Supply Curve
23:24 - Measuring Long Run Aggregate Supply with GDP per Capita
#forex #stocks #forextradingcourse #forexcourse #financialeducation #fundamentalanalysis #forextradingforbeginners #forextrading #stockmarketforbeginners #longrunaggregatesupply #macroeconomics #unemployment
Full 100 video Stocks & Forex Trading Course available for FREE at https://www.getmetrading.com
Lesson 7 of 100 - Macro Fundamental Analysis Module (Macroeconomics)
Lesson Spreadsheet Download: https://getmetrading.com/
(HD Financial Education Course)
This 100 video Stocks & Forex Trading Course is designed to provide traders and investors with everything they need to know to navigate the financial markets like a Professional trader and investor.
The Stocks & Forex Course is structured in four key parts to provide a complete financial education. The four key areas covered in this Course are:
1) Macro Fundamental Analysis (Lessons 1 to 59)
2) Fundamental Analysis of Stocks & Companies (Lessons 60 to 72)
3) Price Action & Technical Analysis (Lessons 73 to 83)
4) Advanced Risk Management Principles (Lessons 84 to 100)
Lesson 7 Overview:
In this lesson you will learn how the Long Run Aggregate Supply Curve represents the Natural Rate of Unemployment in an economy and how deviations to the left and to the right of the Long Run Aggregate Supply Curve represent temporary and unsustainable levels of output which cause either an Inflationary Gap (Positive Output Gap) or a Deflationary Gap (Negative Output Gap).
When an economy is operating at the Natural Rate of Unemployment the economy is considered to be running at Full Employment.
Note that Full Employment is not 0% Unemployment. This is a common misconception and when Monetary Authorities take policy stances to move the economy towards Full Employment, this means they are looking to achieve the Natural Rate of Unemployment. In the US this tends to fluctuate between 4-5% Unemployment.
We will discuss the concept of Unemployment & the Natural Rate of Unemployment in future videos in this Stocks & Forex Course.
STOCKS & FOREX MARKET DIRECTION KEY
When an economy is operating to the Right of the Long Run Aggregate Supply Curve due to a shift in the Aggregate Demand Curve:
This reflects a period of Inflation / Reflation in an economy & the domestic currency falls on the Forex market whilst domestic Stocks tend to rise as GDP increases.
When an economy is operating to the Right of the Long Run Aggregate Supply Curve due to a shift in the Aggregate Supply Curve:
This reflects a Goldilocks economy & the domestic currency rises on the Forex market whilst domestic Stocks tend to rise also as GDP increases.
When an economy is operating to the Left of the Long Run Aggregate Supply Curve due to a shift in the Short Run Aggregate Supply Curve:
This reflects a period of Deflation in an economy & the domestic currency rises on the Forex market whilst domestic Stocks tend to fall as GDP decreases.
When an economy is operating to the Left of the Long Run Aggregate Supply Curve due to a shift in the Short Run Aggregate Supply Curve:
This reflects a period of Stagflation in an economy & the domestic currency falls on the Forex market whilst domestic Stocks tend to fall also as GDP decreases.
Video Times:
00:07 - Why the Long Run Aggregate Supply Curve is vertical
01:08 - How the Long Run Aggregate Supply Curve relates to the Central Bank mandate of Full Employment & the Natural Rate of Unemployment
04:37 - How the Long Run Aggregate Supply Curve relates to the Business Cycle
05:59 - The difference between sustainable & unsustainable levels of economic output
10:52 - Factors which shift the Long Run Aggregate Supply Curve
23:24 - Measuring Long Run Aggregate Supply with GDP per Capita
#forex #stocks #forextradingcourse #forexcourse #financialeducation #fundamentalanalysis #forextradingforbeginners #forextrading #stockmarketforbeginners #longrunaggregatesupply #macroeconomics #unemployment
