Short Answer 
Equilibrium in a market is a stable state where prices do not fluctuate due to balanced forces between buyers and sellers. There are two types of equilibrium: static equilibrium, which involves no movement in prices, and stagnation, characterized by low economic activity and minimal inflation. Understanding these concepts aids investors in developing strategies during stagnant market conditions.
Step 1: Understand Equilibrium
The term for a market period that is not moving up or down is called equilibrium. In this state, the forces influencing prices are balanced, meaning that there is no significant fluctuation in trading conditions. Buyers and sellers agree on prices, leading to a stable marketplace.
Step 2: Differentiate Between Types of Equilibrium
Within equilibrium, we can observe two types of conditions: static equilibrium and stagnation. Static equilibrium describes a situation with no unbalanced forces, resulting in no motion in prices or market actions. Stagnation, on the other hand, refers to a broader economic framework where activity remains low, often accompanied by minimal inflation.
Step 3: Recognize the Impact of Stagnation
During periods of economic stagnation, the market might show little to no growth or decline. This indicates a stand-still atmosphere where trading conditions are stable, and price movements are minimal. Understanding this can help investors make informed decisions regarding their strategies in a stagnant market.