The flashcards below were created by user
kyle.coughlin
on FreezingBlue Flashcards.
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Why is Germany so successful in exporting?
- stong businesses
- wage restrain in recent years
- geograpgical location in Europe (central)
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German Economic Style
social market economy
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What are the Mittelstand?
- the small and medium size businesses that produce as much as 70% of German output
- between 20 and 500 employees
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Are German wages high?
yes, average wages in Germany are some of the highest in the wold
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What's Mitbestimmung?
- the idea that managers and workers must sit down together to determine what to do
- the German name for co-determination
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Are unions strong in Germany?
- yes, they are very strong
- these help keep the system going
- around 45% of labor force is unionized
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How does the labor situation affect Germany’s competitiveness?
- positive: german workers are loyal, motivated, hard working, and have few strikes
- negative: system is too expensive and customers are increasingly unwilling to pay for it. need for consensus also makes the system inflexible and slow to change
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Why have German banks been more powerful than the German stock market?
- German government support: each state has a government owned bank
- German savers prefer banks: people have high savings rate and put $ into secure bank rather than risky market
- German businesses prefer bank financing: like the privicy and convenience and long run focus
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What was the Bundesbank's main policy goal, and why?
- Germany's powerful central bank
- lots of political independence
- practiced a tight monetary policy to prevent high inflation
- raised interest rates whenever inflation seemed a threat
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Who controls monetary policy in Germany now?
now that Germany uses the euro, the ultimate monetary authority is the European Central Bank (ECB)
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