Economics is the only field in which two people can get a Nobel Prize for saying the opposite thing.
What is economics? Economics includes the study of labor, land, and investments, of money, income, and production, and of taxes and government expenditures. Economists seek to measure well-being, to learn how well-being may increase overtime, and to evaluate the well-being of the rich and the poor. Economists try to figure out what’s the equilibrium point for supply and demand of money with considering all the factors as list above.
M1: The most narrative measure of the domestic money supply that includes only money to be used for spending on goods and services. M1 includes currency, checking account balances and travelers' checks. This money measure is closely watched by financial observers because it is a key indicator of past and future Federal Reserve
M2 are primarily household’s holdings of savings deposits time deposits, and retail money market mutual funds.
GNP is the value of all final goods and services produced in the country. GDP is the gross measure of economic activity and the major indicator of economic performance. GNP is sum of Personal Consumption, Private Investment, Government Purchases and Net of Exports over Exports
GDP also call gross domestic income (GDI), which is the annual amount of goods and services produced in a country
Money X Velocity = Price Level X Real GNP
Other key statistic economic indicators published at monthly basis are: Retail sales, Consumer confidence, Product Price Index (monitor inflation), Employment statistics, Personal income, Factory orders & Durable goods, Housing Starts, Purchasing Manager Index. Closely watch the trends of this index give very good indication of how healthy the economy is.
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