economics ch 8.1-8.3a
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35 Terms
Saving
leads to wealth and prosperity for a family/nation
More savings
leads to more financial security
The grasshopper and the ant
Fable written by jean de la fontaine
The grasshopper
didn't work or save during summer; in the winter, she was not prepared
The ant
was hard-working and ready for winter
Investment
Commitment of current resources in expectation of future profit
“The ant and the grain”
fable by Leonardo DaVinci; example of investment
Planting a grain or a seed now
will lead to crops in the future
Private sector
Most savings in America come from this sector
Research and development
invested in by businesses
Saver
the person who puts their money in the bank
Creditor
the bank that takes the money and lends it to another
Debtor
the one who borrows the money from the bank/saver
Inflation
caused by the printing of excess money
Checking account
also called a transaction account
Transaction account
allows checks or debit withdrawals to occur up to the amount in the account
Check
a written order that authorizes a bank to withdraw money from an account
Savings account
only allows limited transactions; allows an account owner to earn interest
Certificate of Deposit (CD)
an account that guarantees a set interest rate and a specific maturity date
Money market account
allows limited transactions and pays an interest rate that changes with the demand for the loan when there is a certain amount of money in the account
Federal deposit insurance Corp. (FDIC)
insures bank accounts up to $250,000
to gain interest or dividends
this desire is the incentive to save
The anticipation of a reward
prevents money from being spent in the present