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The economy of Denmark is a modern mixed economy with comfortable living standards, a high level of government services and transfers, and a high dependence on foreign trade. The economy is dominated by the service sector with 80% of all jobs, whereas about 11% of all employees work in manufacturing and 2% in agriculture. The nominal gross national income per capita was the seventh-highest in the world at $58,439 in 2020. Correcting for purchasing power, per capita income was Int$57,781 or 10th-highest globally. The Income distribution is relatively equal, but inequality has somewhat increased during the last decades. This increase was attributed to both a larger spread in gross incomes and various economic policy measures. In 2017, Denmark had the seventh-lowest Gini coefficient of the 28 European Union countries. With 5,822,763 inhabitants, Denmark has the 36th largest national economy in the world measured by nominal gross domestic product (GDP), and the 51st largest in the world measured by purchasing power parity (PPP).
Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced in a specific time period. GDP (nominal) per capita does not, however, reflect differences in the cost of living and the inflation rates of the countries; therefore, using a basis of GDP per capita at purchasing power parity (PPP) may be more useful when comparing living standards between nations, while nominal GDP is more useful comparing national economies on the international market. Total GDP can also be broken down into the contribution of each industry or sector of the economy. The ratio of GDP to the total population of the region is the per capita GDP and the same is called Mean Standard of Living.
A variety of measures of national income and output are used in economics to estimate total economic activity in a country or region, including gross domestic product (GDP), gross national product (GNP), net national income (NNI), and adjusted national income. All are specially concerned with counting the total amount of goods and services produced within the economy and by various sectors. The boundary is usually defined by geography or citizenship, and it is also defined as the total income of the nation and also restrict the goods and services that are counted. For instance, some measures count only goods & services that are exchanged for money, excluding bartered goods, while other measures may attempt to include bartered goods by imputing monetary values to them.
The economy of Dominica is reliant upon agriculture, particularly bananas, with the financial services industry becoming increasingly the island's largest source of income. Banana production employs, directly or indirectly, upwards of one-third of the work force. This sector is highly vulnerable to weather conditions and to external events affecting commodity prices. The value of banana exports fell to less than 25% of merchandise trade earnings in 1998 compared to about 44% in 1994.
A subsidy or government incentive is a form of financial aid or support extended to an economic sector generally with the aim of promoting economic and social policy. Although commonly extended from the government, the term subsidy can relate to any type of support – for example from NGOs or as implicit subsidies. Subsidies come in various forms including: direct and indirect.
A consumer price index is a price index, the price of a weighted average market basket of consumer goods and services purchased by households. Changes in measured CPI track changes in prices over time.
In economics, the GDP deflator is a measure of the level of prices of all new, domestically produced, final goods and services in an economy in a year. GDP stands for gross domestic product, the total monetary value of all final goods and services produced within the territory of a country over a particular period of time.
The world economy or the global economy is the economy of all humans of the world, referring to the global economic system which includes all economic activities which are conducted both within and between nations, including production, consumption, economic management, work in general, exchange of financial values and trade of goods and services. In some contexts, the two terms are distinct "international" or "global economy" being measured separately and distinguished from national economies while the "world economy" is simply an aggregate of the separate countries' measurements. Beyond the minimum standard concerning value in production, use and exchange, the definitions, representations, models and valuations of the world economy vary widely. It is inseparable from the geography and ecology of planet Earth.
Household final consumption expenditure (HFCE) is a transaction of the national account's use of income account representing consumer spending. It consists of the expenditure incurred by resident households on individual consumption goods and services, including those sold at prices that are not economically significant. It also includes various kinds of imputed expenditure of which the imputed rent for services of owner-occupied housing is generally the most important one. The household sector covers not only those living in traditional households, but also those people living in communal establishments, such as retirement homes, boarding houses and prisons.
In business, total value added is calculated by tabulating the unit value added per each unit of product sold. Thus, total value added is equivalent to revenue minus intermediate consumption. Value added is a higher portion of revenue for integrated companies and a lower portion of revenue for less integrated companies ; total value added is very closely approximated by compensation of employees, which represents a return to labor, plus earnings before taxes, representative of a return to capital.
An indirect tax is a tax that is levied upon goods and services before they reach the customer who ultimately pays the indirect tax as a part of market price of the good or service purchased. Alternatively, if the entity who pays taxes to the tax collecting authority does not suffer a corresponding reduction in income, i.e., impact and tax incidence are not on the same entity meaning that tax can be shifted or passed on, then the tax is indirect.
Gross fixed capital formation (GFCF) is a macroeconomic concept used in official national accounts such as the United Nations System of National Accounts (UNSNA), National Income and Product Accounts (NIPA) and the European System of Accounts (ESA). The concept dates back to the National Bureau of Economic Research (NBER) studies of Simon Kuznets of capital formation in the 1930s, and standard measures for it were adopted in the 1950s. Statistically it measures the value of acquisitions of new or existing fixed assets by the business sector, governments and "pure" households less disposals of fixed assets. GFCF is a component of the expenditure on gross domestic product (GDP), and thus shows something about how much of the new value added in the economy is invested rather than consumed.
The farm gate value of a cultivated product in agriculture and aquaculture is the market value of a product minus the selling costs.
Household income is a measure of the combined incomes of all people sharing a particular household or place of residence. It includes every form of income, e.g., salaries and wages, retirement income, near cash government transfers like food stamps, and investment gains.
In economics, gross value added (GVA) is the measure of the value of goods and services produced in an area, industry or sector of an economy. "Gross value added is the value of output minus the value of intermediate consumption; it is a measure of the contribution to GDP made by an individual producer, industry or sector; gross value added is the source from which the primary incomes of the SNA are generated and is therefore carried forward into the primary distribution of income account."
The total support estimate (TSE) is an Organisation for Economic Co-operation and Development (OECD) indicator of the annual monetary value of all gross transfers from taxpayers and consumers arising from policy measures that support agriculture, net of the associated budgetary receipts, regardless of their objectives and impacts on farm production and income, or consumption of farm products. The TSE can be expressed in monetary terms or as a percentage of the gross domestic product. In addition to the TSE, other measures used to compare levels of support to agriculture across counties include the producer support estimate (PSE), consumer support estimate (CSE), and general services support estimate (GSSE).
The producer support estimate (PSE) is an indicator of the annual monetary value of gross transfers from consumers and taxpayers to agricultural producers, measured at the farm gate level, arising from policy measures that support agriculture, regardless of their nature, objectives or impacts on farm production or income. Examples include market price support, and payments based on output, area planted, animal numbers, inputs, or farm income. PSEs, which are updated and published annually by the Organisation for Economic Co-operation and Development, can be expressed in monetary terms: as a ratio to the value of gross farm receipts valued at farm gate prices, including budgetary support ; or, as a ratio to the value of gross farm receipts valued at world market prices, without budgetary support.
Market price support (MPS) is an indicator, developed by the OECD, used in the calculation of Producer and Consumer Subsidy Equivalents (PSE/CSE). The PSE and CSE acronyms were changed en 1999 to Producer and Consumer Support Estimate. MPS is the annual monetary value of gross transfers from consumers and taxpayers to agricultural producers arising from policy measures creating a gap between domestic market prices and border prices of a specific agricultural commodity measured at the farm gate level. Conditional on the production of a specific commodity, MPS includes the transfer to producers associated with both production for domestic use and exports and is measured by the price gap applied to current production. The MPS is net of producer levies on sales of the specific commodity or penalties for not respecting regulations such as production quotas. In the case of livestock production MPS is net of the market price support on domestically produced coarse grains and oilseeds used as animal feed.
The General Services Support Estimate (GSSE) is an Organisation for Economic Co-operation and Development (OECD) indicator of the annual monetary value of gross transfers of general services provided to agriculture collectively, arising from policy measures that support agriculture, regardless of their nature, objectives and impacts on farm production, income, or consumption of farm products. Examples include research and development, education, infrastructure, and marketing and promotion programs. The GSSE can be expressed in monetary terms or as a percentage of the total support to agriculture.
This glossary of economics is a list of definitions of terms and concepts used in economics, its sub-disciplines, and related fields.
References
This article incorporates public domain material from the Congressional Research Service document: Jasper Womach. "Report for Congress: Agriculture: A Glossary of Terms, Programs, and Laws, 2005 Edition" (PDF).
