Mike Freemen asked:


The subject of economics is one of the most important, but it is also one of the least understood. It has been said that getting a roomful of economists to agree on anything is an exercise in futility, and this has led many people to assume that the world of economics is too difficult for the lay person to understand.

While the world of economics can be intimidating and difficult to understand, simple economics as it applies to real people is quite a bit more straightforward. After all, when you set a family budget for the month, you are engaging in economics. When you shop around for the best price on that plasma TV or laptop computer, you are engaging in economics. When you study the stock market to choose the best mutual fund, you are using economics to guide your decision making.

Fortunately for all of us, it is not necessary to hold a masters degree in economics in order to make sound economic decisions. A careful study of the market around you and a good understanding of the business world you are in can be your guide when it comes to economics. Starting with a business you know can be a good way to make sound economic and investment decisions, and a great way to start building your financial future.

Learning how to save and invest has always been important, but it is perhaps more important today than ever before. There is no doubt that the economic landscape has been changing, Those traditional defined benefit pension plans that protected our parents are fast disappearing, and today every worker needs to have a good understanding of economics and the stock market in order to effectively invest his or her 401(k) to save for retirement. It is important to begin a comprehensive economics savings plan as soon as possible, since time can help savings grow and accumulate for the future.

Many people think that the study of world economies is a dry and boring pursuit, but in fact this is not the case. The world of economics affects all aspects of our daily lives, from how much we pay for a gallon of gas to how much we pay for that morning cup of coffee. Learning how the economies of the world work can have a great affect on your own economy, so it makes sense to learn at least a little bit about this seemingly esoteric science.



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Mansi Gupta asked:


Economic indicators are regularly released governmental statistics that indicate the growth and health of a country especially its economy. Economic indicators mostly influence the value of a country’s currency. These are key statistics that show the direction of the economy. The Trade Deficit, the Gross National Product (GNP), Industrial Production, the Unemployment Rate, Inflation Rate, Factory Utilization Rate and the Business Inventories are instances of economic indicators.

Economic indicators are used to analyze the economic behavior of a country and predict the manner in which economy will act in near future. On the basis of types of predictions economic indicators are of three kinds:

· Coincident economic indicator

· Leading economic indicator

· Lagging indicators

A coincident economic indicator happens in tandem with an economic event. This indicator occurs at approximately the same time as the conditions they signify. The paradigm instance of it is company payrolls. These payrolls are coincident indicators because they make payment and simultaneously increase the localized economy. Personal income is also a coincidental indicator for the economy. High personal income rates will coincide with a strong economy. The coincident indicators do not predict future events but change with a change in time and economy of the stock market.

A lagging indicator is one that follows an event. This indicator is an event, which happens after the corresponding economic cause occurs just like the amber light is a lagging indicator for the green light as amber trails green. The unemployment rate of a country is an example of a lagging indicator because as the economy is doing badly or companies are expecting a downturn in the economy, the unemployment rate increases accordingly. Media is also a lagging economic indicator for the news is always reported few hours before the actual economic fluctuation that they point to. A lagging indicator is immensely significant because of its ability to confirm that a pattern is happening or about to occur.

Leading indicators are events that take place right before an economic shift. The leading indicators are instrumental in forecasting future events. The leading indicators exhibit immense accuracy in the world of finance. An example of leading indicators is the bond yields. Bond yields are leading indicators of the stock market because on behalf of these bond traders anticipate and further course of the stock market and economy of the country.

However in economics the classification of several factors is subject to debate. For instance according to some people the Federal Reserve is a leading indicator while for others it is a lagging indicator. The trend of the market indicates either that the market reacts to the Federal Reserve changing interest rates or that the Federal Reserve changes interest rates only in response to the market. Seeing practically the Federal Reserve can be viewed as both a leading and lagging indicator.

Every week dozens of economic surveys are conducted and several economic indicators are released. In order to understand the current and future of the market and so enjoy a successful business, it is very important for all the investors to ***** the economic indicators skillfully.



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