The economy gauge is for those who have no feeling in their right foot. It tells you when you are stepping on the gas. Obviously if you don't step on the gas you will use less fuel. It does help to be moving down the road when using less fuel in order to get good mileage. In other words the reading at idle will be maximum but since you aren't moving you can't get good mileage.
It is a vacuum gauge on most MBs. Later models have calculated mpg figures which are calculated using load values from the engine management system and road speed. On BMWs since the mid 80's their indicator which looked like a vacuum reading was actually similar to the new calculated readings. In other words it was smart enough to know that at high manifold vac readings such as idle/no speed there was no movement so Zero mpg. Its gauge while very high on deceleration (foot off the gas) would go to zero once stopped.
Owner 24 bay BSC
Bosch Master, ASE master L1
26 years MB technician