Economy

Question 1

When did Germany surrender

Answer 1

8th May 1945

Question 2

What was the difference this time

Answer 2

Did not end with a armistice the allied were fully in control

Question 3

What did the Allies want to balance out in the economy

Answer 3

Wanted to rebuilt the economy but also prevent Germany from starting another world war attain reparations

Question 4

How did they stop Germany from starting another world war

Answer 4

Bans on the munition industry and restrictions on chemical outputs

Question 5

Reichsmark after WWII

Answer 5

Worthless

Workers were hard to attract as wages didn’t cover the cost of living

Transport links and communication crossed over zones which were run differently (soviet) this hampered economic recovery

Therefore the black market emerged
1KG of sugar worth RM1 in 1947
was RM120-180 in the black market

Question 6

Refugee problem

Answer 6

4.5 million refugees which included- Concentration camps, were expelled from Eastern Europe

Question 7

evidence of dire economic situation in Germany

Answer 7

16,000 German prisoners of war stayed in France after the war.

Question 8

West and East Germany divide currency

Answer 8

Due to the Cold War the separation of the eastern zone (German democratic republic) and the western (Federal Republic of Germany)

The western zone was given 1.4million in aid due to the Marshall plan
Western powers also backed it for the new currency Deutschmark

Question 9

How did the currency reform help the FRG

Answer 9

help break up the black market
Restore confidence real wages, saving, spending
Factory production went up as a result

Question 10

Social market Economy definition

who introduced ?

Answer 10

Ludwig Erhard
Free market economy with elements of social support for the poorest.

Allowed the capitalist economy to settle ( business tax concessions and wage restrictions)with a responsible government as a safety net ( trade unions and co-determination)

Question 11

What did Ludwig Erhard

Answer 11

Was director of economic administration
Economics Minister of Germany 1949-1963

Overall
Introduced the DM

Consumers
The economic council gave him permission to destroy all rationing except essential food bread and milk powder

Firms
Wages were fixed to Nov 1948 to allow businesses to establish

Workers
Introduced co-determination allowed workers to make part in the management of the business in 1951.

This boosted the confidence of consumers and helped the economic recovery

Question 12

Equalisation of Burdens Act

Answer 12

1952 Bundestag which helped raise money and redistribute to help many people start again

Question 13

Consequences of Erhard reforms

Firms and factory
workers
industry

Answer 13

Impact on firms and factories

• Had to replace machinery and train workers
• some failed as they could not pay wages due to currency reforms some just lay off workers

Impact on workers
-unemployment grew 1948- 442,000
1950- 1.8 million and then dropped t 1 million

Impact on industry
-Car production in 1959 was 4.5 times greater than in 1950
steel production doubled

Focus on consumer goods

Question 14

Opposition
Socialist
America
Britain

Answer 14

Socialists- opposed the change to price fixing because they wanted to nationalise the industries and have state control

America- Supported the change as also switched to a social market economy

Britain- Opposed the change from a command economy which included cartelisation and price fixing as there were worried about worker exploitation.

Question 15

Factors that contributed to Germany economic miracle from 1955

Answer 15

The Korean War
New Investment
Workers

Question 16

Korean War

Answer 16

Korean War demand for war supplies– America switched to war production— therefore a greater demand for its industrial goods such as chemicals, steel and electrical goods

1955 FRG joined NATO- allowed it to re-arm and start producing war materials due to the war

Question 17

New investment

Answer 17

By the Mid 1950s business recovered and invested in new efficient technology and focused on making high-quality goods and kept their prices low.

Reputation improved and therefore exports which enabled the business to grow and employ more workers

Question 18

Workers

Answer 18

The influx of refugees meant there was a large pool of guest workers after phase of training was provided these workers helped provide an large efficient workforce

Large- helped keep wages low
Efficient- Helped produce quality and large amount of goods

Question 19

GDR Skilled labour

Answer 19

3.6 million Skilled workers came from the GDR to the FRG to indulge in the consumer culture which helped boost the economy and help save the government expenditure on training.

Question 20

VW success example

Answer 20

1960
500 vw dealerships
1960s- sales averaged 400,000 per year

Question 21

Crisis that Germany faced

Answer 21

Recession of 1966-67
Oil crisis of 1973 and 1978
Challenges of the 1980s