FRG Economic development and policies.

Question 1

How much did the FRG receive from USA in Marshall aid.

Answer 1

1.4 million

Question 2

What was the social market economy?

Answer 2

A mix between free market capitalism and socialist government intervention

Question 3

What where the tax policies?

Answer 3

Decline in tax especially for the middle and working class.

Question 4

Name three events which marked Germany’s connections with Europe?

Answer 4

.International Ruhr authority 1949 - 1951
.European coal and steel community 1951 1957
.European economic community 1957

Question 5

When was the Ernhard era?

Answer 5

1949 - 1966

Question 6

When was the grand coalition?

Answer 6

1966 - 1973

Question 7

What was West Germany 1949 like?

Answer 7

.1.4Million from USA Marshall Aid
.Strong industrial economy; many factories and plants survived wartime destruction.
.Ludwig Erhard - economic minister until 1963
.End of rationing and price controls
.Tax reforms; reduced tax for lower classes.
.Social market economy (Mix of capitalism and socialism).
.War industries banned.

Question 8

What where the Government causes of the The economic Miracle 1955 - 1966?

Answer 8

.Work creation schemes to tackle unemployment in the 1950’s, rapid rebuilding of German cities.
.Investment aid law provided D,M3.2 Billion to industrial development.
.Joining the EEC
.Anti trust laws used to prevent monopolies
.Banking controls
.Social Market econemy

Question 9

what are the External factors that are causes of the The economic Miracle 1955 - 1966? -

Answer 9

.World economic recover after WW2 increased demand for German exports.
.Marshall plan provided financial aid to Germany
.Korean War allowed Motor car exports to increase.
.Emigrants from other countries such as east Germany.

Question 10

What are the Factors unique to Germany that are causes of the The economic Miracle 1955 - 1966??

Answer 10

.Limited defence spending
.Exports where huge to German industry
.Economic foudnations
.Co - determination

Question 11

What where the Effects of the Economic Miracle?

Answer 11

.Rapidly declining employment by 1960 had fallen to 1.2 per cent of the workforce.
.Rising exports
.Rising income after 1952
.Growing investments
.Emergence of new industrial centres.
.National income went from 845 Billion in 1950 - 1633 Billion to 1960.

Question 12

What where the 1965 - 69 economics like?

Answer 12

.Small recession that showed the FRG to not be invulnerable.
.Government spending had increased
.Wages growing faster then productivity causing inflation

Question 13

What was the 1973 - 1978 oil crisis?

Answer 13

.OPEC increased oil prices sharply, high rise in unemployment (3million) and inflation over 5%
.caused recession and economic issues and led to crisis of economic confidence.

Question 14

What was the Integration into European economy?

Answer 14

.International Ruhr authority to give mutual power over the Ruhr.
.European coal and steel community 1951 - 7 established cooperation and trade.
.EEC - European Economic Community 1957 -
Created free trade zone, boosted German exports.

Question 15

What was the economic situation in the 1980’s?

Answer 15

.Growing inflation, unemployment, (1.7M in 1981, over 9% ivy 1985), rising public debt.

Question 16

Apart from the damage to infrastructure and housing, name two other economic problems facing Germany in 1945.

Answer 16

welfare burden (refugees), black market, loss of machinery/ factory production (due to French & Soviet dismantling), weak currency, lack of co-operation between Allied governments, lack of skilled & strong labour force (eg many POWs) or other plausible answers.

Question 17

What was the name of the economics minister from 1949 to 1963 who introduced the ‘social market economy’ to Germany?

Answer 17

Ludwig Erhard

Question 18

In what year did the director of economics of Bizonia (the man in answer 2) replace the Reichsmark with the Deutschmark, abolish price controls and relax rationing?

Answer 18

1948 ( all done by Erhard)

Question 19

Which war in the 1950s helped boost German exports of industrial goods, chemicals and electrical goods ?

Answer 19

Korean War

Question 20

One of the key successes of the economic reforms of the 1950s was a fall of unemployment from 11% in 1950 to what in 1960?

Answer 20

1.3%

Question 21

What was set up in 1951, setting up a free market and close co-operation between France and Germany in fuel and heavy industry?

Answer 21

ECSC- European Coal and Steel Community

Question 22

What event in 1973 led to a serious recession and rising unemployment in the FRG?

Answer 22

Oil crisis

Question 23

Willy Brandt, chancellor 1969-74, increased spending on public welfare from 25 to 33% as a proportion of GDP. Name two examples of his increased welfare spending.

Answer 23

300% increase in science & education spending, increased pensions for war widows & veterans, social housing, extension of health insurance,earlier retirement pensions, university grants, raised school leaving age.

Question 24

Kohl introduced cuts to public spending in the 1980s, insisting budget increases should not be above how much?

Answer 24

3%

Question 25

A key strength of the post -war German economy in these years was buoyant exports. Give examples of two exports.

Answer 25

Cars ( Volkswagen) Radios ( Grundig), electrical goods, machinery, chemicals, steel or other plausible