[LEKCJA ANG.] Online business

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The topic for today is „dot-com bubbles”.
 
Task 1.
Read the text below to get the general idea:

 
The invention of the Internet led to one of the biggest economic booms in the second half of the 1990s. A sudden rise of computer-based companies created a new kind of economy, known as the dot-com economy. At its peak there was a huge demand to constantly trade, spend or invest a lot of money online in so called ‘’hot startups’’. In the early 2000 this trend resulted in the appearance of totally irrational phenomenon often referred to as the dot-com bubble.
 
The majority of investors were then valuing businesses not on the basis of their real earnings but instead on potential profits that they may generate in the future. A lot of speculators were seeking financial opportunities in companies which in fact did not have clear business plans, and therefore they would never bring any return on the investment. The excitement over the possibility of earning quick and easy money was so big that people started to ignore rational thinking and kept pumping money into more and more Internet ventures. That is how the dot-coms became real dot-bombs and the bubble burst. Too much money was coming into the market too quickly to fund companies that did not have well thought-over business strategies. In most cases it simply meant huge initial losses. When the bubble deflated, entrepreneurs had to admit that they were blinded by early successes which finally led to catastrophic results. Many of them lost substantial sums of money trying to get rich too quickly and they learned some valuable lessons after the crash.
 
When the dot-com bubble was over, businessmen became more cautious when it comes to investing in new technology ventures and began to put emphasis again on realistic plans. As a result, a lot of weaker companies have definitely disappeared from the market, leaving the space for more sustainable and down-to-earth business entities. The policy of modern ‘’growth over profit’’ was no longer popular and the basic principles of the old-fashioned and common sense ‘’investment theory’’ prevailed again. Everything got back on track in the end.
 
Task 2.
Study the text carefully and answer the detailed questions below:

 

1. What led to one of the biggest economic booms in history?
…………………………………………………………..…………..

2. Why were companies called dot-coms?
…………………………………………………………..…………..

3. Where did people start to invest money in the 1990s?
…………………………………………………………..…………..

4. What did investors tend to do?
…………………………………………………………..…………..

5. What did newly created online companies lack?
…………………………………………………………..…………..

6. How did entrepreneurs behave in the beginning?
…………………………………………………………..…………..

7. How did the dot-com bubble finish?
…………………………………………………………..…………..

8. How did investors change after the crash?
…………………………………………………………..…………..

9. What was the positive outcome of the bubble?
…………………………………………………………..…………..

10. Which theory prevailed?
…………………………………………………………..…………..

 
Task 3.
Watch the video „What are economic bubbles?” and tick (√) only those statements that have been heard in the recording:

 

 

1. In modern western capitalism the weather is usually stormy. …..

2. An economic bubble is typical of western modern capitalism. …..

3. A bubble appears when prices continue to rise beyond the true value of something. …..

4. A bubble happens when people think that everybody else is buying or going to buy something. …..

5. People never exhibit mechanisms of herd behavior typical of animals. …..

6. During bubbles people value companies only because other people value them highly. …..

7. J.M. Keynes believed that people are able to foresee the future. ……

8. The driving force behind bubbles is always the herd mentality and inability to stand out in a crowd. ……

9. There is an element of insanity when we describe the bubble-like behavior. ……

10. Consequences of bubbles which burst can be catastrophic mostly to average people. ……

 
 
LEKCJA DO POBRANIA:
Set 58 – Online business

 
KLUCZ ODPOWIEDZI:
Set 58 – Online business -KEY

 
 
Żródło: Agencja tłumaczeń i szkoła językowa Skrivanek
 
 
 

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