West Germany: ECONOMIC STABILITY IN THE YEARS 1965 TO 1989 Flashcards
Wat did the FRG experience between 1966-67?
A recession
Identify 3 consequences of the economic recession?
- Trade reduced
- Production decreased
- Unemployment increased
How did the government approach the recession of 1966 - 67?
- increased government spending
- introduced economic stabilisation law in 67
- introduced cartels to stop prices rising
By how much did government spending increase between 1966-70?
1965 - 46.7 mil on social welfare
1970 - 115.9 mil on social welfare
What two laws were introduced to help gov. deal with the economic crises?
- Economic stabilsation law ( 1967), gave gov. power to intervene in times of economic crises.
- New clause added to BAsic Law (1968), gov. had authority to move money between Lander.
What did the gov. set up to control price levels?
Cartels
What affected the economy in the 1970s?
International oil crises of 1973 qnd 1978
How much did the gov. spend on 140mil tonnes of oil in 1972?
10.8bil
How much did 140mil tonnes of oil cost in 1973 and 1978?
1973: 32.8 bil
1978: 49 bil
What measures were introduced to reduce oil consumption?
- Car free sundays -> speed limits
- Investment in atomic power
- German industries converted fuel
- Public spending cuts
- Higher income tax
How many did unemployment hit in 1981?
1.7million
What evidence is there that the gov. was moving away from a social market economy?
-Public spending cuts
How did Chancellor Khol further reduce the gov. interferencce in economy in 1980s?
- Cut maternity and public benefits
- Reduced retirement age to 58 years
- Gov. sold of shares in state run companies
What had happened to the economy by the end of the 80s?
Level of economic stability had declined
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