Iceland 's Economic Outlook Report

The complexities and the uncertainties of the government spending leave consumers in a world of dubiety and lead to declines on their spending and investment. The governments need to provide simple and elegant solutions in response to the recession. The consumers need to understand these solutions which would allow them to

This task request will be focussed on providing input for the development of Inflation Working Paper (WP) currently in draft phase. The recent version of the WP is attached for your reference purpose only.

1). In 2016, the inflation rate was at 2.07 percent, and as of February 2017 the rate is about .90 percent (“Inflation Rate,” n.d.). As we can see, the economy has bounced back from its position during the recession. GDP has increased drastically since 2009, unemployment has decreased past its position from 2007, the interest rate has risen, and inflation has also gone up which indicates a strong and healthy economy. Although a higher interest rate is unfavorable for consumers and businesses, it means that the government is confident that the economy will continue to improve. This also means that consumers have enough disposable income to spend on whatever they wish, so the government does not need to lower the rate in order to encourage borrowing and spending. These metrics indicate that the economy has recovered from the Great Recession, and is continuing to improve.

Fiscal policy is a means by which our government regulates its level of spending and tax rates to observe and impact a country’s economy. It is a budget strategy through which a central bank influences the nation’s money source. The positive and negative consequences of fiscal policy include shortage, surplus, and debt. All have fluctuating effects on how individuals view the economy, make subjective decisions, and react to unsettling changes. Individuals should consider focusing on making independent decisions that provide short and long-term profits in uncertain periods. The decisions made by individuals have lasting effects on the economy when spending increases and reinvestments in the economy are established.

2.|Use the IS/LM-AD/AS model to illustrate graphically how expansionary fiscal and monetary policy can help stabilize the output when economy is in a recession. |

While it is true that the use of macroeconomic have declined in the twenty-first century, nevertheless, the governments’ policies are still effectives and have assisted in promoting economic growth. Fiscal policies and monetary policies are two of the ways the states manage the national economy (Barma and Vogel, p. 540). Through the fiscal policies, which consists of the taxation and government expenditure, the federal government is able to positively or negatively affect economic activities, and also be able to stimulate certain sectors of the market (Barma and Vogel, p. 540). While strict restriction on monetary policies, particularly the flow of capitals can affect the level of trade and foreign investments in a nation, states are still capable of controlling such economic activities through their

In 2008, world economic downward has greatly impacted Iceland’s economic. The three biggest banks in Iceland were bankrupt because they were not able to pay the debts. As a result, Iceland banking system collapsed (Holmes & McArdle, 2008). Noted that, most world financial institutions decided to drop Iceland’s credibility. And loan from international market and investment were significantly dropping in Iceland’s financial market. It leaded Iceland’s kroner to become very unattractive. To regain and reconstruct Iceland’s financial system, using Canadian Dollar as its official currency is fundamental since Canadian Dollar is creditable and steady currency.

Admittedly, currency volatility is in the cards again, but it speaks of short-term expectations being in state of flux, which is likely to be a transitory phenomenon. No fundamental misalignments in key relative prices strongly suggest the ongoing disinflation will persist (Chart II). With the economy still reporting high joblessness along with ample spare capacity, CPI readings should continue their slide lower: 12-month trailing inflation is now 4.1%, against 9.3% one year ago. The Central Bank has plenty of room to further cut benchmark interest rates and then axe abnormally high real rates. A benign credit cycle comprising lower bank spreads together with decreasing cost of credit is underway.

Tourism plays a vital role in economic development in most countries around the world. The industry has not only direct economic impact, but also significant indirect and influential impacts. There is agreement among experts that the travel and tourism sector is the fastest growing of global economy. According to the latest UNWTO World Tourism Barometer, international tourism receipts surpass US$ 1 trillion in 2011, growing about 3.8%up from 2010 (WTO, 2012).

Since the global financial crisis of 2008, the UK government has been implementing various policies to combat the recession and stimulate economic growth. This essay will look at how effective the fiscal and monetary policies used since the crisis are in achieving the four-macro economic objectives. In addition, I will provide my input on the best way the UK government can carry out these policies.

Another aspect of impact of tourism on a country’s economy is that it facilitates the expansion of the market of goods and services. Foreigners come to a country willing to spend money on different goods and services, thus increasing the amounts of sales. This is a great chance for producers and service providers to receive larger profits. This concerns not only hoteliers, tour operators, and souvenir shops owners. Public transportation, retail stores of different kind, restaurants, and cafes benefit from international tourism. Obviously, if these industries are in demand, businesses will be expanding. On the one hand, it means that more money is paid to the budget. On the other hand, profits generated by the owners are spent inside the country, affecting almost all the fields of the

Since Malta joined the European Union in 2004, the free movement of goods and services within the community, brought about through membership, has re-defined the roles and relationships between suppliersand retailers. It has therefore become increasingly common for retailers to bypass importers/suppliers and purchase directly from the source. In the meantime, Malta being a country with limited natural resources, a favourable climate and long history, Malta's economy has traditionally been highly dependent on tourism. As a direct result of the current global recession, the number of tourists visiting our island is expected to decline over the next 5

In September 2008, thousands of financial sectors all over the world went bankrupt like dominoes after the failure of Lehman Brothers Bank, which is also known as the Financial Crisis of 2008, caused the severe recession of the economies around the world. In order to help the country out of crisis, the central banks in different countries had to take measures to stimulate the growth of economy. The goal of this essay is to introduce the measures that Bank of England have taken in 2008 of financial crisis and will discuss the macroeconomics consequences and effects. Three measures taken by Bank of England will be presented in first section and how macroeconomics outcomes influenced by policies and objectives will be discussed in the second section.

Sweden is one of the most competitive economies in the European Union, being ranked 2nd in the Europe 2020 Index of Competitiveness out of 28 European countries (World Economic Forum, 2014). With strong governmental institutions, which deliver high quality social services, and a low corruption level, Sweden is one of the five European countries closes to fulfilling the Europe 2020 programme goals and scoring at a considerably high level in all three main drivers of growth (Tilford & Whyte, 2010).

At the end of 2013, Norway was calculated as having the second highest GDP in the world (only under Luxembourg), as it was 65,515 US dollars per capita. The following graph (Chart 1 - see appendix) shows the growth in Norway’s GDP from 1970. Here, we can see the effect of the recession in 2008, and how it reflected on the downfall of the GDP’s value. Only until 2010 is where we see the value become even with the pre-crisis number. Yet, according to Figure 1 (below), the index shows that it has not yet reached the value that it would have, following the trend prior to 2008.