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Germany History A-Level > economy in the FRG > Flashcards

economy in the FRG Flashcards

1
Q

which German industries were banned in 1945?

A

munitions and armaments

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2
Q

what German industries had their outputs restricted?

A

chemical industries

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3
Q

how were reparations to be paid?

A

by equipment and machinery from all zones

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4
Q

how did the French and the USSR take reparations?

A

by dismantling factories

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5
Q

what effect did war and reparations have on economic recovery in Germany?

A

was made very difficult by heavy allied bombing, targeted at German factories as well as cities

whole cities needed to be rebuilt alongside industry

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6
Q

what happened to the Reichsmark after WW2?

A

it’s value became worthless
a black market had evolved as a result

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7
Q

why was economic recovery difficult in the early FRG years?

A

transport and communication crossed zones which made trade difficult
military commanders were in charge of the different zones so the zones were all ran differently (esp the Soviet zone)

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8
Q

how many German POWs decided to stay in France instead of returning to Germany and why?

A

160,000
many saw Germany’s economic and physical decimation as well as allied occupation too much to deal with

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9
Q

how many refugees came to Germany?

A

10 million
would be a vital asset for Germany’s economic recovery

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10
Q

when was the Marshall Plan?

A

1948

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11
Q

how much aid was given to West-German zones in 1948 by the Marshall Plan?

A

$1.5 billion

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12
Q

when was the Deutschmark introduced?

A

June 1948

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13
Q

how many DM were each adult given when the DM was introduced?

A

DM60

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14
Q

how many DM for RM100?

A

DM6.5

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15
Q

what did the introduction of the DM do for the economy?

A

greater confidence in German currency
as wages now were meaningful workers started working more and saving
led to a consumer goods market forming

black market was broken up
economy was stabilised

LIKE Rentenmark w/Weimar

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16
Q

who introduced the DM?

A

Ludwig Erhard

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17
Q

when was Erhard made Minister for Economics in the FRG?

A

September 1949

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18
Q

what kind of economy did Erhard believe in?

A

a social market economy

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19
Q

what was a social market economy?

A

a free market economy with elements of social support for the poorest

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20
Q

when was all but essential rationing ended?

A

June 1948

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21
Q

for how long did Erhard keep wages fixed?

A

until November 1948

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22
Q

why did Erhard keep wages fixed?

A

to ensure businesses could recover and establish themselves

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23
Q

what was the Equalisation of Burdens Act of 1952?

A

system of compensation which was generated through a tax placed on all assets

money raised from this act was distributed to help German start again

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24
Q

what issues did Erhard’s reforms face?

A

machinery had to be replaced
new workers needed to be trained

many businesses could not afford to pay wages of workers so many workers were laid off

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25
Q

unemployed in 1948

A

442,000

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26
Q

unemployed in 1949

A

937,000

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27
Q

unemployed in 1950

A

1,800,000

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28
Q

unemployed in 1955

A

1,000,000

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29
Q

car production in 1959

A

4.5 times greater than in 1950

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30
Q

steel production in 1959

A

doubled from 1950

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31
Q

what was Germany’s new economy focussed on?

A

consumer goods market

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32
Q

who opposed Erhard’s social market economy?

A

the EC and the Bundestag
Britain
industrialists

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33
Q

why did industrialists oppose the social market economy?

A

they wanted a return to cartelisation and fixation of prices to allow for growth

34
Q

instead of cartelisation and price fixing what did Erhard want?

A

greater competition over industry
- cartels to be broken up
- price fixing to be abandoned

35
Q

what gave Erhard enough support with his economic policy in the Bundestag?

A

a capitalist market was able to coincide with social welfare for the poorest
this appealed to the majority of the Bundestag

36
Q

which policies did Erhard carry forward?

A

he gave businesses tax concessions
removed wage restrictions
BUT encouraged the setting up of trade unions

37
Q

when was co-determination introduced?

A

1951

38
Q

what was co-determination?

A

the right of workers to take part in managing the business they work for
allowed for greater worker representation in industry

39
Q

what did co-determination lead to?

A

strikes no longer happened
allowed German industry to carry on growing

40
Q

what were the reasons for the economic miracle after 1955?

A

the Korean War
joining NATO
new investment
workers

41
Q

the Korean War

A

began in 1950
most countries focussed on production of war supplies which Germany was banned from doing

instead Germany produced chemicals, steel and electrical good which were in demand in countries such as the USA which had switched focus to wartime production

42
Q

joining NATO

A

the FRG joined NATO in 1955
was allowed to rearm and enter war production
largely as a result of the Korean War

43
Q

new investment

A

businesses which had recovered in the 1950s were able to heavily invest in more efficient equipment and new factories
increased quality of goods as well as keeping prices low in order to compete
with more exports, more workers could be employed and more raw materials could be bought

44
Q

workers

A

influx of refugees gave businesses a large pool of potential guest workers to use
once trained, a large pool of workers emerged which kept the wages low

45
Q

how many skilled workers migrated from the GDR to the FRG in the 1950s?

A

3.6 million

doctors
engineers

46
Q

why was an influx of skilled workers from the GDR useful for the FRG economy?

A

less money had to be spent on training workers
this money could be spent on redevelopment

47
Q

average sales of VW in the 1960s

A

400,000 per year

48
Q

exports in 1950

A

8.4 billion marks

49
Q

exports in 1960

A

47.9 billion marks

50
Q

exports in 1970

A

125.3 billion marks

51
Q

what were the problems which prevented further economic growth?

A
  • fall in demand of consumer goods
  • setting up of the Berlin Wall
52
Q

fall in demand of consumer goods

A

once everyone had bought goods for the first time, they were replaced at different times
demand therefore fell

53
Q

setting up of the Berlin Wall

A

in 1961
cut off skilled-worker migration from the GDR

54
Q

what was the change in economic policy in 1966?

A

a shift to more government intervention in the economy

55
Q

who was the Minister for Economics in 1966?

A

Karl Schiller

56
Q

what did Schiller do to introduce more government intervention?

A

the Bundesbank was introduced to manage the supply of money

57
Q

what was the role of the Bundesbank?

A

operated independently from the govt
controlled circulation of DM and interest rates
prevented inflation

58
Q

govt spending on social welfare in 1965

A

DM46.7 million

59
Q

govt spending on social welfare in 1970

A

DM115.9 million
despite benefits cuts

60
Q

why had German export figures manage to stay high despite ongoing intl crises?

A

Schmidt had convinced other nations not to implement protective tarrifs during the crises

61
Q

what were the two crises which the FRG was effected by?

A

the recession of 1966-67
the oil crises of 1973 and 1978

62
Q

effects of the 1966-67 recession

A

domestic and intl trade reduced
unemployment rose

63
Q

what had led to the 1966-67 recession?

A

the govt had spent lots on social welfare which almost went out of control
in response there was an increase in government intervention and control

64
Q

in what ways did the govt intervene during the 1966-67 recession?

A

subsidies for agriculture and coal industry
reintroduction of cartels to stop prices rising
1967 Economic Stabilisation Law
adjustments to the Basic Law

65
Q

1967 Economic Stabilisation Law

A

allowed for government intervention in times of economic crisis to limit regional spending

introduced a Five-Year Plan system for all government spending

66
Q

adjustments to the Basic Law

A

money could be moved between Lander to allow the govt to spend more money on poorer Lander

67
Q

who replaced Schiller as Minister for Economics in 1972?

A

Helmut Schmidt

68
Q

how much did the FRG spend on oil in 1972?

A

DM10.8 billion on 140 million tonnes

69
Q

who put up prices of oil and in response to what?

A

OPEC in response to the Fourth Arab-Israeli War

70
Q

how much did the FRG spend on oil in 1973?

A

DM32.8 billion on 140 million tonnes

71
Q

what did a rise in oil price lead to in Germany?

A

an economic crisis
high unemployment
foreign worker contracts were not renewed

72
Q

why did the FRG fare better than other European nations during the oil crises?

A

it’s export market was providing a large enough income to soften the blow
govt measures were put in place to reduce oil consumption

73
Q

govt measures put in place to reduce oil consumption

A

car free Sundays
speed limits on the Autobahn
investment in atomic power
higher income tax and cuts in public spending
non-intervention in oil prices

74
Q

how did not intervening in the price of oil help the FRG economy?

A

by not subsidising oil prices, oil prices rose in line with their actual cost
put people off from using oil
encouraged saving fuel

75
Q

were strikes ever an issue in the FRG?

A

most employers saw a moderate pay rise, in line with what workers were requesting, as less harmful to them than a strike

76
Q

what was created going into the 1980s?

A

a strong divide between rich and poor

77
Q

unemployment in 1981

A

1.7 million

78
Q

why was the 1981 govt unpopular?

A

cut public spending which included benefits and housing allowance

went against concept of social market economy

79
Q

why did Kohl’s govt reduce public spending more?

A

Kohl believed that welfare spending created dependency
it was this dependency which led to productivity levels falling as people simply fell back to benefits instead of working hard

80
Q

what cuts did Kohl’s govt introduce?

A

cut to maternity benefit
cut public holidays
reduced the age of retirement to 58

81
Q

which state organisations where partially privatised by Kohl?

A

Lufthansa and Volkswagen

82
Q

had Kohl’s policies worked?

A

YES
they brought down unemployment figures
and
the economic growth rate had risen

Germany History A-Level (54 decks)

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