Business Law~ Chapter 4: Constitutional Law

The U.S. Constitution vests power in the branches of government that form a "check and balance" system. Those branches of government are: a. executive. b. legislative c. judicial. d. All of the above.

D

Strict Scrutiny Test

exacting standard of review applicable to regulation affecting a fundamental right or involving a suspect classification.

The Supreme Court, in Jackson v Metropolitan Edison Co., held that a privately owned electric utility was subject to the Due Process Clause because operating the utility was "state action" since the State had granted the utility a monopoly.

false

The federal government's power to tax has no limitations.

false

Under the Commerce Clause, any state statute that affects interstate commerce is unconstitutional.

false

Action taken by private citizens may constitute state action if the state has encouraged the challenged private action significantly.

true

The federal government's authority to govern economic matters flows from the Commerce Clause.

true

The requirement that a classification have a substantial relationship to an important governmental objective is known as the: a. rational relationship test. b. strict scrutiny test. c. intermediate test. d. Contract Clause.

C

Federal Supremacy

Federal law takes precedence over conflicting State law.

Corporate Political Speech

First Amendment protects a corporation's right to speak out on public issues.

How does the Due Process Clause of the Fourteenth Amendment differ from the Due Process Clause of the Fifth Amendment? a. The Fourteenth Amendment clause protects individuals from violations of their rights by state governments. b. The Fourteenth Amendment clause guarantees both substantive and procedural due process but the Fifth Amendment clause does not. c. The Fourteenth Amendment clause protects individuals against violation of their rights by private individuals as well as the government. d. The Fourteenth Amendment clause requires the application of strict scrutiny in all cases.

A

In the case of ____, Chief Justice Marshall stated, "This great principle is, that the Constitution and the laws made in pursuance thereof are supreme; that they control the Constitution and laws of the respective states, and cannot be controlled by them." a. McCulloch v. Maryland b. Marbury v. Madison c. Shelley v. Kraemer d. Marsh v. Alabama

A

The ____ and ____ Amendments respectively prohibit the federal and state governments from depriving any person of life, liberty, or property without due process of law. a. First, Tenth b. Fifth, Fourteenth c. Fourth, Fourteenth d. Fifth, Ninth

B

A woman claiming sex discrimination because she was passed over for a promotion by her employer, would have her case reviewed under the ____ test of the Equal Protection Clause. a. rational relationship b. intermediate c. strict scrutiny d. None of the above

B

Which of the following is included in the Fourteenth Amendment? a. Free speech clause. b. Equal protection. c. Both (a) and (b). d. None of the above.

B

In the Supreme Court's view, the "necessary and proper" clause: a. authorizes Congress to legislate only in areas mentioned in the list of enumerated powers. b. enables Congress to legislate in areas not mentioned in the list of enumerated powers as long as such legislation reasonably relates to some enumerated power. c. extends "state action" to action taken by private citizens whenever such interpretation is necessary to protect a fundamental right. d. restricts state regulations that obstruct interstate commerce.

B

Since ____, the U.S. Supreme Court has abandoned its earlier approach in substantive due process cases and no longer overturns economic and social legislation, so long as it is rationally related to legitimate governmental objectives. a. 1812 b. 1937 c. 1954 d. 1980

B

Because defamation involves a communication, the protection extended to speech by the ____ Amendment applies. a. Fourth b. Fifth c. First d. Fourteenth

C

The ____ Clause protects against impairing the charter of a corporation formed under a state incorporation statute. a. Supremacy b. Commerce c. Contract d. Takings

C

The ____ case declared the authority of courts to examine governmental actions to determine whether they conform to the U.S. Constitution. a. Abrams v. United States b. Marsh v. Alabama c. Marbury v. Madison d. McCulloch v. Maryland

C

Constitutions serve which of the following functions? a. They are the supreme law of their jurisdictions. b. They establish the structure of and allocate power among the levels of government. c. They impose restrictions upon the powers of government and enumerate rights of the people. d. All of the above.

D

State X passes legislation that requires that unless a mother of children under the age of 7 is found to be unfit, custody in divorce proceedings should be awarded to the mother and not the father. If this statute is challenged, the court will: a. not defer to the legislature and will independently determine whether such a classification of persons is constitutionally permissible. b. determine that fundamental rights and a suspect classification are involved in this legislation. c. only require that the legislation conceivably bear some rational relationship to a legitimate governmental interest. d. review the legislation to see if it bears a substantial relationship to an important governmental objective.

D

Strict scrutiny is used by the U.S. Supreme Court to carefully scrutinize: a. the First Amendment right of freedom of religion. b. the right to engage in interstate travel. c. the right to vote. d. All of the above are situations where strict scrutiny would be applied.

D

The Commerce Clause in connection with the ____ limits the power of the states to tax. a. Fifth and Fourteenth Amendments b. Fourteenth Amendment c. principle of separation of powers d. Import-Export Clause

D

The states may enact legislation concerning a subject in which there is a federal statute if: a.there is a writ of certiorari to the U.S. Supreme Court. b. Congress expressly grants that power to the state. c. the states reserve the right at the time the federal statute is enacted. d. None of the above.

D

Under substantive due process, legislation affecting which of the following would be strictly scrutinized as affecting fundamental rights? a. The right to receive federally guaranteed student loans. b. The right to marry someone from a particular ethnic background if both parties wanted to marry. c. The right of free speech. d. Both (b) and (c).

D

Which of the following is correct with regard to the Bill of Rights? a. It serves as a major restriction on the powers and authority of the federal government. b. It does not apply directly to the states, but the Supreme Court has held that the Fourteenth Amendment makes many of its principles applicable to the states. c. It consists of ten amendments to the U.S. Constitution that were adopted in 1791. d. All of the above are correct.

D

Federal Fiscal Powers~ Eminent Domain

the government's power to take private property for public use with the payment of just compensation.

Procedural Due Process

requires the government decision-making process to be fair and impartial if it deprives a person of; life, liberty, and property.

Equal Protection

requires the similarly situated persons to be treated similarly by governmental actions.

Substantive Due Process

determination of whether a particular government action is compatible with individual liberties.

Federal Fiscal Powers~ Borrowing and Coining Money

enables the Federal government to establish a national banking system and to control national fiscal and monetary policy.

Judicial Review

examination of government actions to determine whether they conform to the U.S Constitution.

Federal Commerce Power

exclusive power of the Federal government to regulate commerce with other nations and among the states.

Commercial Speech

expression related to the economic interests of the speaker and its audience; such expression receives a lesser degree of protection.

Generally, the legislative branch of government has the power to enforce the law.

false

In a sex discrimination case under the equal protection clause, the courts apply the strict scrutiny standard of review.

false

Contract Clause

restricts States from retroactively modifying public charters and private contracts

Federal Preemption

right of the Federal government to regulate matters within it's power to the exclusion of regulation by the States.

Intermediate Test

standard of review applicable to regulation based on gender and legitimacy.

Rational Relationship Test

standard of review used to determine whether economic regulation satisfies the equal protection guarantee.

State Regulation of Commerce

the Commerce Clause of the Constitution restricts the States' power to regulate activities if the results obstruct interstate commerce.

Federal Fiscal Powers~ Taxation and Spending

the Constitution grants Congress broad powers to tax and spend; such powers are important to Federal regulation of the economy.

Federalism

the division of governing power between the Federal government and the States.

Which of the following would NOT be included in the powers of the federal government? a. Power to tax a product produced and consumed exclusively in Alaska. b. Power to grant government contracts to minority corporations. c. Power to condemn a building to make way for an interstate highway. d. Power to tax only incomes above $6,000.

A

A public figure who brings a defamation suit against a newspaper which prints a false story about her must prove actual malice to win the suit.

true

An official action by an agency of the city of Oakwood against one of its citizens would be considered "state action."

true

In equal protection cases involving economic regulation, the courts use the rational relationship test.

true

In relation to the Takings Clause, public use has been held to be synonymous with public purpose.

true

The Commerce Clause limits the power of states to tax.

true

The U.S. Supreme Court upheld a state statute prohibiting corporations from using general treasury funds to make independent expenditures in elections for public office.

true

Procedural due process would require the government to establish a set of fair procedures in all but which of the following cases? a. Where Social Security benefits are refused. b. Where a juvenile criminal is sent to a detention home. c. Where a professor is fired from his tenured position. d. Where a college student is denied a private scholarship.

D

Which of the following is included within the term "property" for purposes of procedural due process? a. Real property b. Social Security payments c. Food stamps d. All of the above.

D

Which of the following activities is regulated by the federal government through its exercise of the commerce power? a. Federal crimes b. Electronic funds transfers c. Civil rights in employment d. Environmental protection e. All of the above.

E

Freedom of Speech

First Amendment protects most speech by using a strict scrutiny standard.

A state constitutional provision conflicts with a valid federal statute. Under the supremacy clause: a. the federal statute is supreme. b. the state constitutional provision is supreme. c. the federal statute is supreme if Congress has expressly so provided. d. the state constitutional provision is supreme if it expressly so states.

A

The federal government has been enabled to establish a national banking system and the Federal Reserve System because of: a. the Article I, Section 8, constitutional grants to Congress of the power to borrow money on the credit of the United States and the power to coin money. b. powers derived from the Commerce Clause. c. delegation by the state governments of some of their enumerated powers. d. the Contract Clause contained in Article I, Section 10 of the Constitution. e. Both (a) and (b).

A

The Contract Clause prevents a state from: a. making contracts with private individuals. b. affecting any agreements between parties. c. contracting with another state. d. None of the above.

D

Due Process

Fifth and Fourteenth amendment prohibit the Federal and State governments from depriving any person of life, liberty, and property without due process of law.

Dr. David Doright is a Professor at a state university. One day he has an argument with the president of the university over which team should win the next Super Bowl. The next day, Dr. Doright is fired for incompetence. He sues, claiming the firing is arbitrary and that he was denied an opportunity to respond to the charges. a. This is not a criminal case, so Dr. Doright has no right to a hearing. b. Dr. Doright appears to have been denied the equal protection of the law. c. The firing by a state university is state action involving a property right that would entitle Dr. Doright to a hearing and an opportunity to respond to the allegations against him. d. The U.S. Constitution does not apply to this case.

C

For the purposes of procedural due process, ____ includes certain entitlements conferred by government, such as social security payments and food stamps. a. the right of free speech b. equal protection c. property d. liberty

C

Classifications based on age and sex are examples of "suspect classifications" in the context of the Equal Protection Clause of the Constitution.

false

Substantive due process addresses the fairness of the process by which a legal rule is applied.

false

The Bill of Rights applies directly to the states.

false

The Bill of Rights was included in the original U.S. Constitution.

false

Most forms of speech are protected by the strict or exacting scrutiny standard.

true

States may enact legislation even where the federal government has created laws.

true

The Minnesota Housing Authority plans to begin eminent domain proceedings to acquire 100 homes to rent to low-income persons. The Housing Authority wants to pay as little as possible for the homes so that they can acquire more homes in the future, but the homeowners insist they are entitled to the fair market value of the property. In a court hearing on the matter, the homeowners are likely to prevail.

true

The Supreme Court has held that, under the Due Process Clause, a driver's license is property which cannot be revoked without procedural due process.

true

The U.S. Supreme Court can invalidate a law if it conflicts with the U.S. Constitution.

true

A classification based on gender or "legitimacy" for a governmental action: a. does not need to bear a substantial relationship to an important governmental objective. b. eliminates the strong presumption of the constitutionality of legislation that is allowed under the rational relationship test. c. does not allow taking into legislative consideration the natural physical differences of gender. d. requires that men and women be treated exactly the same with regard to governmental action.

B

The Supreme Court interprets the Commerce Clause: a. narrowly. b. as granting virtually complete power to Congress to regulate the economy. c. as restricting Congress to the coining of money and taxation. d. as granting Congress the power to take property under eminent domain.

B

The legislative branch's primary check on both the judicial and executive branches is the power to: a. veto executive or judicial decisions. b. approve appointments to the courts and agencies. c. appoint judges and cabinet officials. d. None of the above.

B

Under the Commerce Clause, Congress has the power to regulate: a. only the channels of interstate commerce. b. the channels and instrumentalities of interstate commerce, as well as those activities having a substantial relation to interstate commerce. c. only the instrumentalities of interstate commerce. d. only the channels and instrumentalities of interstate commerce.

B

What constitutional principle requires that similarly situated people be treated similarly by government? a. Free speech b. Equal protection c. Due process d. Eminent domain

B

Whatever powers are not specifically assigned to the United States by the Constitution are reserved to: a. the federal government. b. the state governments or the people. c. the Supreme Court. d. the Congress.

B

Which of the following is not protected by the free speech guarantee found in the Constitution? a. Commercial speech b. Obscenity c. Defamation d. All of the above are protected by the free speech clause.

B

Defamation

a tort consisting of a false communication that injures a person's reputation; such a communication receives limited Constitutional protection.

"Actual malice" in defamation cases against the press requires a showing that a reporter intentionally lied or recklessly disregarded the truth.

true

"Eminent domain" refers to a governmental taking of private property for public use.

true

A government action that treats two classes of similarly situated citizens the same is valid under the Equal Protection Clause.

true

A law is not valid unless it complies with the U.S. Constitution.

true

Since the Supreme Court's abandonment of substantive due process as a critical check on legislation involving individual rights, the ____ Clause is now the most important clause in this regard. a. Procedural Due Process b. State Action c. Equal Protection d. Fundamental Rights

C

Judicial review extends to: a. legislation. b. acts of the executive branch. c. decisions of inferior courts. d. All of the above.

D

Procedural due process pertains to governmental decisions depriving a person of: a. life. b. liberty. c. property. d. All of the above.

D

The extent to which state regulation may affect interstate commerce: a. is decided using a case-by-case analysis. b. is ultimately decided by the Supreme Court. c. will be determined without regard to the extent to which the regulation discriminates against interstate commerce in favor of local concerns. d. Both (a) and (b).

D

The federal government has exclusive power to establish laws governing: a. bankruptcy. b. patents. c. copyrights. d. All of the above.

D

Both the Fifth and Fourteenth Amendments contain due process clauses.

true

The Bill of Rights restricts the power and authority of the federal government.

true

Eminent domain is not one of the recognized inherent powers of government.

false

A star basketball player in the NBA: a. is a "public figure" with respect to a defamation action against a newspaper. b. is a "public official" with respect to a defamation action against a newspaper. c. may win a defamation case against the media if he can prove the media acted negligently in reporting an untruth about him. d. is not subject to the "actual malice" test in defamation actions against the press.

A

Separation of Powers

allocation of powers among executive, legislative, and judicial branches of government.

If private entities engage in public functions, constitutional guarantees such as free speech and due process may apply to their actions under the ____ doctrine. a. state action b. federal preemption c. interstate commerce d. supremacy

A

When the strict scrutiny test is used, a court is free to substitute its thinking for that of the legislature in deciding if a law violates equal protection. Which of the following would NOT be subject to strict scrutiny? a. Legislative appropriations giving more money to single, poor women with dependent children, than to single, poor men with dependent children. b. Requiring black students to attend one high school and white students to attend another. c. Restricting the right to vote to those who were born within the state. d. Giving free lunches only to school children of Mexican descent.

A

Which of the following is a major limitation on the federal government's power to tax? a. Indirect taxes must be apportioned among the states. b. All custom duties and excise taxes must be uniform throughout the United States. c. Progressive tax rates are prohibited. d. All of the above.

B

A classic and important example of strict scrutiny of classifications based upon race is the desegregation case of: a. Board of Curators of the University of Missouri v. Horowitz. b. Silkwood v. Kerr-McGee Corporation. c. New York Times v. Sullivan. d. Brown v. Board of Education of Topeka.

D

According to the Tenth Amendment, "the powers not delegated to the United States, by the Constitution, nor prohibited by it to the states, are reserved to the states respectively or to the people." This principle is: a. separation of powers. b. supremacy. c. preemption. d. federalism.

D

The principle of ____ concerns the compatibility of a law or governmental action with fundamental constitutional rights, such as free speech. a. procedural due process b. substantive due process c. the rational relationship test d. equal protection

B

The Bill of Rights was approved by the first Congress to guarantee that the federal government would not abuse its powers.

true

Cary, a prominent local attorney, was the subject of a newspaper article concerning a trial in which he was involved as counsel. In that article, Cary was reported to have been disbarred in another state ten years before. It is not true of Cary, but of his cousin, Frank. Cary will win a suit for defamation against the newspaper: a. simply by proving the falsity of the statement. b. only if Frank was not disbarred. c. only if he can prove that the paper acted with actual malice. d. only if he can show harm to his character resulted from the statement.

C

The State where Laura's father had lived passes a statute which requires that male heirs be preferred over female heirs in selecting an executor of an estate. Laura, a lawyer, would like to be the executor of her father's estate, but so would her eighteen-year-old brother who just flunked out of college. She challenges the provision as being a violation of the equal protection clause of the Fourteenth Amendment. The case is now under consideration by the United States Supreme Court. In deciding the constitutionality of the provision, the Court will: a. apply the rational relationship test. b. apply the strict scrutiny test. c. apply the intermediate standard test. d. create a new test.

C

The main purpose of the Bill of Rights was to: a. enumerate all of the rights of U.S. citizens. b. list the powers of the federal government. c. provide for restrictions on the power of the federal government. d. provide limitations on the powers of individuals.

C

Which of the following is correct with regard to the powers of government in the United States? a. The federal government is not a government of enumerated powers. b. The federal government is all-powerful except in cases of state criminal law. c. Legislation enacted by Congress does not need to be based on a specific power granted to the federal government by the Constitution. d. Congress may not enact legislation that affects the states.

C

The Contract Clause of the Constitution applies only to the actions of state governments and not to the federal government.

true

John is a white Haitian who has obtained U.S. citizenship. State X passes a law that all Haitian-born citizens must submit to AIDS testing. The courts will review this law based on: a. deference to the legislature as to whether such a classification of persons is constitutionally permissible. b. whether there is clear and convincing evidence that there is no reasonable basis for the legislation. c. the rational relationship test. d. the strict scrutiny test.

D

Judicial review is: a. a power of federal, but not state, courts. b. a check by the judicial branch on legislative action. c. a check by the judicial branch on executive action. d. Both (b) and (c) are correct.

D

The Takings Clause requires just compensation if the government: a. actually takes the property. b. regulates to such an extent that it deprives the owner of all economic use of the property. c. regulates property in such a way that it reduces the value of the property in any way. d. Both (a) and (b) are correct. e. All of the above are correct.

D

The First Amendment guarantee of free speech applies not only to individuals but also to corporations.

true

The Fourteenth Amendment restricts the power of states to tax.

true

The federal government's power to tax is subject to the limitation that all custom duties and excise taxes must be uniform throughout the United States.

true

The framers of the Constitution considered it unnecessary to include in the original document liberties that the people were to keep for themselves.

true

Under the federalist system, the states retain significant powers; however, the supremacy clause of the Constitution provides that within the areas of regulation that are federal in nature, federal law is supreme.

true

Defamation is a form of speech wholly outside the protection of the First Amendment.

false

Judicial review is another phrase for an appeal of a lower court's judgment.

false

The Bill of Rights was part of the original Constitution which was adopted on September 17, 1787.

false

The Constitution gives the federal and state governments concurrent powers over patents and copyrights.

false

The Contract Clause of the Constitution allows states to retroactively modify public charters and private contracts.

false

The First Amendment allows free speech in any and all circumstances.

false

The Supreme Court has defined the scope of the Commerce Clause narrowly and, therefore, has restricted the powers of the federal government to regulate business.

false

The federal government has no restrictions under the Constitution on its power to impair contracts since the Contract Clause restricts only actions of the states.

false

First Bank would like to place some ads in the local newspaper in support of proposed legislation that it believes would increase its revenues, but there is a local ordinance that prohibits such ads. First Bank consults its attorney because it would like to challenge the ordinance as unconstitutional. In all likelihood, the ordinance is a violation of First Bank's rights of free speech under the First Amendment.

true

In addition to acting as a broad source of federal power, the Commerce Clause also restricts the power of the states to regulate activities if the result obstructs or unduly burdens interstate commerce.

true

Powers given exclusively to the federal government under the U.S. Constitution include the power to establish laws governing bankruptcy and to coin money.

true

Restrictions may be placed on an individual's right to free speech.

true

States have powers to enact regulations if Congress has not preempted state regulation by enacting legislation within its constitutional powers.

true