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Macro economics IA confusion


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Hey guys, I'm working on my IA and there are somethings in my article that are not so clear to me.

My article is about the crisis in Spain and the it is talking about the government buying bonds in order to improve thier economy.Here is what I don't understand:

"But supporters and critics of bond buying have questioned the ECB's insistence on government-approved conditions, saying it ties the ECB's hands in the event of severe financial stress and makes it too reliant on complicated and time-consuming European politics.

If countries have to wait for an official aid program, "this could lead to a situation whereby the ECB is not able to act quickly enough to reduce differences in interest rates," Angel Gurría, secretary-general of the Organization for Economic Cooperation and Development and supporter of ECB bond purchases, said in a German newspaper interview this week."

What do they mean when they say that thier hands are tied and that the intrest rates could cause problems.

If anyone could explain in general what this paragraph is about I would really appreciate it.
Edited by Fermat
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I am also confused, i don't like the bonds thingy :P if you are really feeling you can't explain every thing well because you don't have strong understanding of the article, so why don't you find a simpler one? it may take time, but at the end it's better for you.

Edited by MLI
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I am also confused, i don't like the bonds thingy :P if you are really feeling you can't explain every thing well because you don't have strong understanding of the article, so why don't you find a simpler one? it may take time, but at the end it's better for you.

Yeah but other than that part, this is a great article for me so I didn't feel like getting a new one just for a small confusion.

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if you explain the main points in the article, you are fine, you don't really have to explain every single thing (this is what my teacher says), so i think you might ignore this part or just write 2 sentences about it to show that you understand it, but there are more important points to discuss them :D

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"Tie their hands" does mean that they are restricting them, to a certain extent. If your hands are tied you can't do anything, thus they are restricted. When set into terms with the ECB it means that they are being restricted in terms of changing the interest rates, or something.

a situation whereby the ECB is not able to act quickly enough to reduce differences in interest rates

This is where I am getting confused. "Differences in interest rates" - are they referring to the fluctuating interest rates or the interest rates of different European countries? Heck do I know.

Btw: If I remember it right, this video has some information on Interest rates and how central banks can control it. Take a look at it and maybe you'll gain some understanding and can link that to your article. Good luck!

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Sorry for the late reply guys, I was on vacation. I want to thank dniviE for the explanation and I think I'll stick with this article because the confusing part was relatively small so I'll just write about the other more important things. But if anyone else wants to give this a shot please go for it :)

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I have an other question, what kind of graph should I use in the IA the Keynsian or the classical one (or maybe both?)? Or is it depending on what my aritcle is about (in this case the finalcial crisis in Spain)

Use both graphs and explain the similarities and differences in outcomes.

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I have an other question, what kind of graph should I use in the IA the Keynsian or the classical one (or maybe both?)? Or is it depending on what my aritcle is about (in this case the finalcial crisis in Spain)

Use both graphs and explain the similarities and differences in outcomes.

Yeah that's what I wanted to do but I wasn't very sure because I always end up going above the word limit :S

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