In \(1980,\) Denmark had a GDP of \(\$ 70\) billion (measured in U.S. dollars) and a population of 5.1 million. In 2000, Denmark had a GDP of \$160 billion (measured in U.S. dollars) and a population of 5.3 million. By what percentage did Denmark's GDP per capita rise between 1980 and 2000?

The Gross Domestic Product (GDP) represents the total economic output of a country over a specific time period, typically measured annually. It's essentially the sum of all goods and services produced within a nation's borders, and is a crucial measure of a nation's overall economic activity. The calculation of GDP can be approached in three ways: the production approach, the income approach, and the expenditure approach. The production approach sums up the outputs of every class of enterprise to arrive at the total. The income approach calculates the total national income, including wages, rents, interest, and profits. Lastly, the expenditure approach adds up the value of all purchases made in the country.

In educational exercises, like the one provided from Denmark, GDP helps us understand the scale and strength of an economy within a given year or over a period of years. When we calculate per capita figures—GDP divided by the population—we get a measure of the average economic output per person, which can be a more meaningful comparison of wealth between countries or over time. This normalization allows for a better grasp of the economic welfare and living standards of the average citizen.

Economic growth is a macroeconomic indicator that reflects the increase in a country's economy over a period of time. It’s often gauged by the rise in GDP, indicating an increase in the production and consumption of goods and services. Sustainable economic growth is desired as it typically leads to higher living standards, improved employment rates, and better fiscal health for the nation.

In terms of exercises like our Denmark case study, we measure economic growth by examining changes in GDP per capita. By comparing these figures over the years, we ascertain the real growth that adjusts for population size. When we calculated a 120% increase in Denmark's GDP per capita from 1980 to 2000, it indicated significant economic growth, suggesting improvements in the standard of living and possibly advancements in technologies, productivity, and efficiency within the country.

Macroeconomic indicators are key statistics that provide insights into the state of a country's economic affairs. These indicators encompass a wide range of data points, including GDP, inflation rates, unemployment rates, national income, price indices, and many more. They are used by economists, analysts, and policymakers to understand economic performance, inform fiscal and monetary policy, and make projections about future economic trends.

When solving textbook exercises around these concepts, it’s important to recognize that these indicators are interlinked, and changes in one can affect others. For example, as GDP per capita rises, we may also see changes in consumption patterns, investment levels, and government spending – all of which are categorized under different macroeconomic indicators. The resulting comprehensive picture from these indicators helps us understand the complexities of the economy, beyond just a single statistic or number.