FRG Economy

Question 1

What did Brandt revalue the DM at?

Answer 1

10% higher.

Question 2

How well had the economy recovered by 1947?

Answer 2

Production was 30% of 1938 levels.

Question 3

Why was there potential for very fast economic growth in the FRG?

Answer 3

Many German factories had been unaffected by the war. Industrial plant value far higher after the war than in the 1930s.

Question 4

What was the effect of the war on currency?

Answer 4

Became nearly worthless and people resorted to barter.

Question 5

How much did FRG production rise in 1948?

Answer 5

25% with the addition of Marshall Aid.

Question 6

When was the Deutschmark introduced?

Answer 6

1948

Question 7

What was different about the Deutschmark?

Answer 7

Monetary supply contracted by 90%.

Question 8

How did currency reform harm some?

Answer 8

Savings were not converted favourably, debts up to 400 billion RM were wiped out.

Question 9

How much did industrial output rise as a result of currency reform?

Answer 9

0.5

Question 10

Why did currency reform increase production?

Answer 10

Lead to a far greater amount of investment and lending.

Question 11

How did Erhard increase food production in 1948?

Answer 11

Removed price controls and rationing.

Question 12

How did tax reform stimulate the economy?

Answer 12

Lowered people’s tax, increased money in pocket, increased consumer spending.

Question 13

What had employment fallen to by 1960?

Answer 13

1.2% from 10% in 1950.

Question 14

How much did salaries rise from 1948-1955?

Answer 14

0.8

Question 15

What was the term given to these economic reforms of Erhard?

Answer 15

Social market economy.

Question 16

How much had industrial production increased from 1948-58?

Answer 16

4x

Question 17

How much did savings ratio of income rise from 1950-1960?

Answer 17

3% to 9%

Question 18

What characterised the FRG economy from 1949-1960?

Answer 18

Rising exports, rising incomes, growing investment, growing profits.

Question 19

How did government intervention help the economy in 1949-60?

Answer 19

Work creation schemes, 1952 Investment Law, 1950 Construction Law, joining the EEC, strong currency through the Deutsche Bundesbank.

Question 20

Which non-governmental factors aided economic growth in the FRG from 1949-1960?

Answer 20

Growing world economy, limited defence spending, good resources, Korean War, Marshall Plan.

Question 21

How did codetermination help the economy?

Answer 21

Prevented strikes and loss of production through industrial dispute.

Question 22

How much did National Income increase from 1950-1960?

Answer 22

x2.

Question 23

What was the average growth rate of the FRG economy from 1956-66?

Answer 23

8% a year.

Question 24

What was the effect of high quality German goods?

Answer 24

A large trade surplus through the 1950s and 1960s.

Question 25

How much of the key industries did the state own in the 1950s?

Answer 25

40% coal, 75% aluminium.

Question 26

When was the first recession in the FRG?

Answer 26

1965

Question 27

How much did government spending increase on welfare from 1955-65?

Answer 27

x2.

Question 28

What was Erhard criticised for spending too much on?

Answer 28

Agriculture, US military hardware, railways.

Question 29

How did Erhard respond to the recession?

Answer 29

Raised interest rates, cut spending by 10%, suggested a longer work week.

Question 30

Why did the Erhard CDU/FDP coalition collapse in 1966?

Answer 30

Disagreement over raising taxes vs. cutting spending.

Question 31

How did Schiller fix the recession?

Answer 31

5 year financial planning and state intervention. Raising VAT and lowering state spending.

Question 32

What was the 1967 Stabilisation law?

Answer 32

Altered taxes, increased lending, formalised cooperation between government and employers in economically difficult times.

Question 33

How was the federal structure altered to deal with the recession?

Answer 33

Allowed greater central controls over taxes and spending.

Question 34

Why did the Grand Coalition collpase?

Answer 34

Disagreement over the valuation of the DM.

Question 35

What was the priority of Brandt's government?

Answer 35

To pursue social reforms and welfare reform.

Question 36

How much did Brandt increase welfare spending by in his time in office?

Answer 36

From 25% to 33% of government spending.

Question 37

What were the issues with Brandt's welfare policies?

Answer 37

They spurred on inflation.

Question 38

How much more was the FRG paying for imports as a result of the OPEC crisis?

Answer 38

17 billion DM.

Question 39

How much had unemployment risen to by 1975?

Answer 39

0.046

Question 40

Why did the FRG deal with the oil crisis better than most economies?

Answer 40

They had a strong export market.

Question 41

How did the government respond to the 1973 Oil Crisis?

Answer 41

Turning to nuclear energy, further EEC integration, abolition of merger regulation.

Question 42

What did Kohl's government do to keep the economy stable?

Answer 42

Reduced public spending, began privatisation.

Question 43

How happened to Germany's exports under Kohl?

Answer 43

They doubled throughout the 1980s.

Question 44

What was the result of the ECSC?

Answer 44

Coal trade between members increased x10.

Question 45

What was the EEC?

Answer 45

Free trade zone, economic cooperation etc.

Question 46

How much was the FRG investing in the EEC by the 1980s?

Answer 46

55 billion DM.

Question 47

How much did car ownership rise by from 1950-65?

Answer 47

2 million to 12.1 million.

Question 48

What fuelled the growth in standards of living in the FRG?

Answer 48

High wage growth and low inflation in the early years.

Question 49

How much more did clothing cost in the GDR than FRG?

Answer 49

2x as much

Question 50

What stopped the unrestrained growth of standard of living in the 1970s?

Answer 50

Inflationary pressure due to the OPEC crisis and high government spending.

Question 51

What are the three periods of the FRG economy?

Answer 51

1949-66 the social market economy, 1966-82 state intervention, 82-90 return to the free market.

Question 52

How much did the number of state employees rise by from 1950-85?

Answer 52

2.5