Economic Terms

The video explains the origins of the stock market, starting with the Dutch East India Company in the 1600s, which unknowingly created the first stock market by selling shares to fund voyages. It then transitions to the modern stock market, highlighting its complexity and the process of launching a company through an IPO. The video discusses how supply and demand influence stock prices and investor behavior, emphasizing the importance of long-term investing. It concludes by noting that the stock market is accessible to everyone, thanks to the internet, allowing everyday investors to participate.

What was the primary reason the Dutch East India Company sold shares to private citizens?

• To reduce the number of ships

• To increase competition

• To fund their expensive voyages

• To avoid paying taxes

What is the first step a company takes when launching on the stock market?

• Advertising to big investors

• Issuing dividends

• Buying back shares

• Merging with another company

How does an increase in stock demand affect stock prices?

• Stock prices become unpredictable

• Stock prices increase

• Stock prices remain the same

• Stock prices decrease

What is the significance of an IPO in the stock market?

• It is a strategy to avoid competition

• It is a method to reduce stock prices

• It allows a company to go public

• It marks the end of a company's growth

What happens to a company's market value if its stock price falls?

• The market value becomes irrelevant

• The market value increases

• The market value decreases

• The market value remains unchanged

What is a potential consequence for investors if a company seems less profitable?

• Investors may buy more stocks

• Investors may ignore the company

• Investors may sell their stocks

• Investors may hold onto their stocks

Which of the following is NOT a factor that influences stock market fluctuations?

• Changes in production technology

• Investor confidence

• Weather conditions

• New laws and trade policies

Why do professionals often recommend long-term investing?

• To minimize the impact of market noise

• To avoid paying taxes

• To quickly make a profit

• To support only large companies

What is the role of human confidence in the stock market?

• It only affects small companies

• It stabilizes stock prices

• It has no impact

• It can trigger economic booms or crises

What has made the stock market more accessible to everyday investors?

• The rise of the Internet

• Government subsidies

• Increased stock prices

• Exclusive investment clubs