- Similar economy to all other Soviet states
- Centrally-planned economy (CPE)
- State-owned factories etc.
- Everyone employed to do something, however insignificant
- Prices fixed administratively by the CPE- didn’t necessarily reflect the product’s value
- Entire year’s economy planned in advance: rate of economic growth, utilisation of raw materials & labour, amount of imports/exports…
- 1981 Plan- assessed amounts of raw materials and amount/quality of end product, to ensure efficient use of resources
East Germany- Economy - All products consumed/used in the GDR were also produced there
- CPE ensured no private businesses and no room for decisions/initiative
- In 1985, over 95% of the total national income was earned by state-owned enterprises.
- Everything distributed in accordance with the 1981 Plan (System of Material Balances)
- Couldn’t predict amounts needed- some places got too much of the product; some got too little
- East German Ostmark practically worthless
- Prices kept constant by heavy subsidies from the government (80% of the cost of basic supplies)
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