Why did the economies of the former East German areas collapse during reunification?
– The government bought factories and businesses, reducing employment.
– East German businesses were unable to compete in the free-market economy.
– After unification, Germany chose to keep the east and west economies separated.
– High economic growth led to a shortage of workers.
Why did the economies of the former East German areas collapse during reunification?
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The correct answer is: East German businesses were unable to compete in the free-market economy.
During reunification, many East German companies struggled to adapt to the competitive pressures of a market economy. These businesses were often less efficient and lacked the investment needed to modernize compared to their West German counterparts. This inability to compete led to factory closures and significant job losses, contributing to the economic collapse in those areas. If you have more questions or need further clarification, feel free to ask!