Channel Islands Welfare

3Channel Islands Welfare

Channel Islands Welfare

Channel Islands Welfare

Question 1

According to the GDP of Channel Island over the last decade, it is quite evident that the country has endured a lengthy spell of economic growth as a result of the collapse of the world economy caused by the European and American recession of 2007-2009.

Question 2

The new increase in the countries level of GDP indicates the county is under high inflation caused by the monetary and fiscal policies to ensure that the country’s economy does not stagnate (Cowen, and Tabarrok 2000.) Using the GDP as the only source of welfare indicator does not apply in correct terms due to the reduction in government spending on activities which are meant to improve the well-being of the people.

Question 3

The businesses enjoy a boom session due to the spending by the governments on activities that promote the business activities of the nation. The Channel Islands is a located in European and is one of the least economies in the region meaning the government ought to sacrifice more to ensure that the economy does not collapse (Brito, 2015).

Question 4

Since the country does not fall in the European Union, its relation with the crown enables it to trade freely with the United Kingdom. It can offer free exports to the United Kingdom making it an exporter due to its comparative advantage against the cost of production in the United Kingdom.

Question 5

However, the GDP of the last five years does not reflect a true and fair value of the countries GDP as well as welfare position due to the factor of inflation. However, a majority of the population leaves above the poverty line making the country capable of sustaining itself without the heavy reliance on government grants and schemes (Brito, 2015).


Cowen, T. and Tabarrok, A., 2000. An economic theory of avant-garde and popular art, or high and low culture. Southern Economic Journal, pp.232-253.

Brito, J.A., 2015. Social Cohesion and Economic Growth: Small States vs Large States.