Recently I have seen new words in the newspaper related to macro-economy. This is a reminder for myself:
It is a time of bad economic conditions where the government cuts
its spending or increases taxes to reduce its budget deficit and debt.
As creditors become unwilling to lend money to businesses or individuals
because debtors increase the risk of default due to the economic and political conditions.
In the US, Bush tax breaks end and the tax
increases and spending cuts begin at the end of 2012, which could push
the US economy back into recession.
4) Operation Twist
In an attempt to lower long-term interest
rates with central bank's balance sheet unchanged, central bank buys long-term government bonds and sells short-term bonds.