Business Law Chapter 25

5. Which of the following is the appropriate term for a requirement by the Federal Trade Commission that a company run advertisements in which the company explicitly states that formerly advertised claims were untrue? A. Corrective advertising B. Repeal advertising C. Notice publication D. Notice advertising E. Action publication

A. Corrective advertising

13. To which of the following loans does the Truth-in Lending Act apply? A. Loans to a natural person B. Loans to a natural person and to a limited partnership C. Loans to a natural person, loans to a limited partnership, and loans to a general partnership D. Loans to natural person, loans to a limited partnership, loans to a general partnership, and loans to a corporation E. All loans

A. Loans to a natural person

4. Which of the following does the Federal Trade Commission require if a company wishes to claim that its products are "Made in the U.S.A."? A. That the claim not be used unless all, or virtually all, of the product's components and labor are of U.S. origin. B. That the claim not be used unless absolutely all of the components and labor of the product are of U.S. origin. C. That the claim not be used unless at least 75% of the product's components and labor are of U.S. origin. D. That the claim not be used unless at least 50% of the product's components and labor are of U.S. origin. E. That the claim not be used unless at least 55% of the product's labor and components are from Canada, Mexico, or the United States.

A. That the claim not be used unless all, or virtually all, of the product's components and labor are of U.S. origin.

19. Which of the following is the agency responsible for enforcing the Federal Food, Drug, and Cosmetic Act? A. The U.S. Food and Drug Administration B. The Federal Consumer Administration C. The Federal Consumption Administration D. The Federal Safety Commission E. The U.S. Uniform Drug Commission

A. The U.S. Food and Drug Administration

10. Which of the following is true regarding the obligation, if any, of a consumer who discovers that a company has sent the consumer unsolicited merchandise? A. The consumer may treat the merchandise as a gift. B. The consumer may only treat the merchandise as a gift if it has a value of under $25; otherwise, the consumer must call the seller and ask if the seller would like to cover return postage. C. The consumer may only treat the merchandise as a gift if it has a value of under $50; otherwise, the consumer must call the seller and ask if the seller would like to cover return postage. D. The consumer may only treat the merchandise as a gift if it has a value of under $100; otherwise, the consumer must call the seller and ask if the seller would like to cover return postage. E. The consumer must return the merchandise.

A. The consumer may treat the merchandise as a gift.

1. What type of agency is the Federal Trade Commission? A. Executive B. Independent C. Collateral D. Approved E. Certified

B. Independent

16. Which of the following governs the issuance of credit reports? A. The Prohibited Report Act B. The Fair Credit Reporting Act C. The Unfair Reporting Act D. The Loan Reporting Act E. The Credit Protection Act

B. The Fair Credit Reporting Act

18. Which of the following was passed in response to the growing number of identity theft cases? A. The Identity Crisis Act B. The Fair and Accurate Credit Transactions Act C. The Fair Credit Billing Act D. The Credit Card Fraud Act E. Both the Fair Credit Billing Act and the Credit Card Fraud Act

B. The Fair and Accurate Credit Transactions Act

3. Which of the following is a statement in which a company agrees with the Federal Trade Commission to stop disputed behavior but does not admit it broke the law? A. Agreed stoppage B. Command order C. Consent order D. Agreed order E. Approved acknowledgement

C. Consent order

20. Which of the following conducts investigations into the safety of motor vehicles? A. The Vehicle Investigation Commission B. The Vehicle Safety Administration C. The National Highway Safety Administration D. The Motorized Safety Administration E. The Transportation Safety Commission

C. The National Highway Safety Administration

2. Which of the following are interpretations of consumer laws created by the Federal Trade Commission to encourage businesses to stop unlawful behavior? A. Consumer guides B. Consumer recommendations C. Business interpretations D. Industry guides E. Business requirements

D Industry guides

12. Which of the following are federal laws regulating the credit industry? A. The Truth-in-Lending Act B. The Fair Credit Reporting Act C. The Fair Debt Collection Practices Act D. All the above E. The Truth-in-Lending Act and the Fair Credit Reporting Act, but not the Fair Debt Collection Practices Act

D. All the above

17. Which of the following are prohibited by the Fair Debt Collection Practices Act? A. Contacting a debtor at work if the debtor's employer objects. B. Misrepresenting the collection agency as a lawyer or police officer. C. Contacting a debtor who has notified the collection agency that he or she wants no contact with the agency. D. All the above. E. Contacting a debtor at work if the debtor's employer objects, and misrepresenting the collection agency as a lawyer or police officer are prohibited; but contacting a debtor who has notified the collection agency that he or she wants no contact with the agency is not prohibited.

D. All the above.

7. Which of the following does the Federal Trade Commission consider abusive action by telemarketers? A. Using profane or obscene language toward a customer. B. Calling a person who has previously requested to be taken off the particular seller's calling list. C. Calling a residence before 8 a.m. D. All the above. E. Using profane or obscene language toward a customer and calling a person who has previously requested to be taken off the particular seller's calling list, but not calling a residence before 8 a.m.

D. All the above.

8. Which of the following is true regarding regulation of tobacco under federal law? A. Radio advertisement of cigarettes is prohibited. B. Radio advertisement of smokeless tobacco is prohibited. C. Television advertisement of smokeless tobacco is prohibited. D. All the above. E. Radio advertisement of cigarettes is prohibited and television advertisement of smokeless tobacco is prohibited, but radio advertisement of smokeless tobacco is allowed.

D. All the above.

9. Which of the following is required by the Federal Trade Commission Cooling-Off rule in regard to door-to-door sales? A. That consumers have three days in which to cancel purchases made from salespeople who come to their homes. B. That the salesperson notify the consumer, both verbally and in writing that the sales transaction may be cancelled. C. That the consumer be notified in writing in the same language in which the oral negotiations were conducted. D. All the above. E. That consumers have three days in which to cancel purchases made from salespeople who come to their homes and that the salesperson notify the consumer in writing in the same language in which oral negotiations were conducted that the transaction may be cancelled, but not that notification also be made verbally.

D. All the above.

6. Which of the following is false regarding the Telephone Consumer Protection Act of 1991? A. It forbids telephone solicitation using an automatic telephone dialing system. B. It forbids telephone solicitation using a prerecorded voice. C. It makes it illegal to transmit advertisements via fax unless the recipient agrees to the fax transmission. D. Only the Federal Communications Commission can take action to enforce the act. E. If a telemarketer willfully violates the act, the court can decide to triple the amount owed to the consumer.

D. Only the Federal Communications Commission can take action to enforce the act.

15. Which of the following must credit card applications include under the Truth-in-Lending-Act? A. The APR B. Annual fees C. The grace periodA for paying without a finance charge D.All the above E. The APR and the annual fees, but not the grace period for paying without a finance charge.

D.All the above

11. Which of the following is true regarding federal regulation of used-car sales? A. Odometer fraud is prohibited. B. There are requirements regarding notification that a car is being sold "as is." C. The dealer may attach a label providing that no further inspection is needed if the car has already gone through a thorough inspection by the dealer. D. All the above. E. Odometer fraud is prohibited and there are requirements regarding notification that a car is being sold "as is," but the dealer is not allowed to indicate that no further inspection is needed.

E. Odometer fraud is prohibited and there are requirements regarding notification that a car is being sold "as is," but the dealer is not allowed to indicate that no further inspection is needed.

14. Which of the following must be true in order for a loan to come within the protection of the Truth-in-Lending Act? A. The credit or loan must be subject to a finance charge. B. The credit or loan must have repayments of more than four installments. C. The credit or loan must have an interest rate of over 5%. D. All the above E. The credit or loan must be subject to a finance charge, or have repayments of more than four installments; but there is no requirement regarding the loan having an interest rate of over 5%.

E. The credit or loan must be subject to a finance charge, or have repayments of more than four installments; but there is no requirement regarding the loan having an interest rate of over 5%.