Importance of Soviet economic problems

Question 1

What was the social and political significance of Gorbachev’s economic policies?

Answer 1

-General public saw a decreased standard of living and suffering hardships, while a small entrepreneurial class benefitted
-Static wages that didn’t match inflation

Question 2

What were some positive steps forward as a result of Gorbachev’s policies?

Answer 2

-USSR made 61 joint-venture agreements with Western countries by 1988, bringing much needed capital and technological developments to the USSR
-Agricultural policies that stopped collectivisation
-Redundant and corrupt components of Soviet agency responsible for central economic planning eliminated

Question 3

What were some negative consequences of Gorbachev’s policies?

Answer 3

-Consumer goods prices increased significantly and inflation was rampant
-Plan made to eliminate Soviet budget deficit -> by 1988 deficit 13% of Soviet GNP (US budget deficit 3.5% of US GNP)
-Alcohol policies cost Soviet state almost 100b rubles in taxes lost