economics: section 8.3

transaction account

what’s the other term that a checking account can be called?

transaction account (checking account)

allows checks or debit withdrawals to occur up to the amount in the account

check 

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

limited transactions

fill in the blank

a savings account only allows ______ ___________

interest

fill in the blank

a savings account allows an account owner to earn _______

certificate of deposit (CD) 

an account that guarantees a set interest rate and a specific maturity date

1. set interest rate

2. maturity date

fill in the blank

the certificate of deposit is an account that guarantees a ____ _______ _____ and a specific ______ _____

money market account

fill in the blank

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

1. limited transactions 

2. changes 

3. money 

fill in the blank

a money market account allows ______ __________ and pays an interest rate that ______ with the demand for the loan when there is a certain amount of _______ in the account

federal deposit insurance corp (FDIC)

insures bank accounts up to $250,000

insurance 

contract between two parties in which one party protects the other against certain types of loss in exchange for payments called premiums

premiums

fill in the blank

insurance is a contract between two parties in which one party protects the other against certain types of loss in exchange for payments called __________

pension plan

an arrangement provided by an individual’s employer for the intent of providing for the employee’s retirement from work

defined benefit plan 

promises to pay a certain amount per month after retirement based on salary and length of service

defined contribution plan

both employer and employee contribute to retirement; not a promised amount (ex: 401k)

extended warranty

insurance for repairs or replacement of a certain item

collateral 

something of value a lender can claim in the event of non-payment

homeowners insurance

required if a person takes out a loan to buy a house; in the case of non-payment, the bank forecloses (sells home or property) to recover the balance of a mortgage

forecloses

fill in the blank

homeowners insurance:

in the case of non-payment, the bank _________ (sells home or property) to recover the balance of a mortgage

2010 affordable care act (ACA) 

what’s an example of a healthcare insurance? 

premium 

the amount that one pays for a policy