economic developments 1949-61

• What is one advantage of a government-controlled economy?

  Focus on public transport over private cars
• How does a government-controlled economy prioritize social needs?

  It produces items for the community's good
• What is a disadvantage of a centrally planned economy?

  Quantity over quality
• What is a consequence of centralization in an economy?

  Reduction in innovation and creativity
• Why is planning difficult in a centrally planned economy?

  It's hard to predict needs five years ahead
• What is an inefficiency in a centrally planned economy?

  Producing goods that aren't needed
• How do profit motives affect pricing in a centrally planned economy?

  Prices do not reflect supply and demand
• What was the main goal of the First Five Year Plan?

  Develop heavy industry
• What was one anticipated increase in the First Five Year Plan?

  National income projected to increase by 60%
• What was the projected increase in metallurgy during the First Five Year Plan?

  153.6%
• How did planners decide what to produce in the First Five Year Plan?

  They determined production and methods centrally
• What was the impact of the First Five Year Plan on pig iron production?

  Increased from 37,000 to 1,517,000 tonnes
• What conflict did the SED face during the First Five Year Plan?

  Balancing heavy industries and consumer goods
• What was a consequence of GDR's membership in COMECON?

  Each country focused on a specific industry
• What was a major problem with the central planning of the GDR?

  Overestimated economic capacity and needs
• What was the state budget deficit of the GDR by 1952?

  700 billion Ostmarks
• How did the GDR's trade with Eastern European countries affect its economy?

  It bought more than it sold, creating a deficit
• What was the impact of prioritizing heavy industry over consumer goods?

  Increased shortages of basic consumer items
• What were some consequences of cuts in the welfare budget?

  Increased prices and reduced transport services
• What happened to the prison population from July 1942 to May 1953?

  Increased by 30,000
• What was the goal of agricultural collectivization in the GDR?

  Achieve more through larger farms and economies of scale
• How many collective farms existed in the GDR by May 1960?

  19,345 collective farms
• What was the outcome of the campaign to collectivize farms before spring 1960?

  Led to disruption and resentment among farmers
• What was the trend in the number of collective farms from 1957 to 1961?

  Increased significantly, then slightly decreased
• What was a significant opposition to socialist economics in the GDR?

  Farmers resented collectivization and left
• How much land was left unused due to landowners fleeing?

  750,000 hectares
• What was a consequence of removing the profit motive in the GDR?

  Disincentive to innovate and take risks
• What was a common issue faced by workers in the GDR?

  Unrealistic work norms led to strikes
• What was the general sentiment towards Communism in the GDR?

  Most people did not actively support it
• When did discontent in the GDR come to a head?

  June 1953
• What are the strengths and weaknesses of a centrally planned economy?

  Strengths:

  • Focus on public needs
  • Centralized decision-making

  
  

  Weaknesses:

  • Quantity over quality
  • Reduced innovation
  • Inefficiencies in production
  • Lack of profit motives
• What were the main goals and outcomes of the First Five Year Plan?

  Goals:

  • Develop heavy industry
  • Increase living standards

  
  

  Outcomes:

  • Significant increases in production
  • Conflict between heavy industry and consumer goods
  • Economic deficits and shortages
• What were the effects of agricultural collectivization in the GDR?

  • Increased number of collective farms
  • Resistance from farmers
  • Disruption and resentment
  • Land left unused due to migration
• What were the long-term issues faced by the GDR's economy?

  • Persistent economic deficits
  • Shortages of consumer goods
  • Lack of motivation among workers
  • Opposition to socialist policies