Chapter 20

True or False? Regulatory concerns do not play a major role in the advertising decision-making process.

False

True or False? The advertisement industry prefers government intervention to self-regulation for controlling advertising abuses.

Flase

True or False? The NAD, CARU, ERSP, and the online internet-based advertising accountability program are staffed primarily by attorneys.

True

True or False? The US postal service has control over advertising involving the use of mail and ads that involve lotteries, obscenity, or fraud.

True

A promotion is considered a lottery if

a. A consideration, such as making a purchase, is present. b. A prize is not offered c. The odds of winning are not against the consumer d. The participants is not required to give up something of value. e. Winning a prize depends on a skill C

The _________ is the division of the Federal Trade Commission (FTC) that analyzes the impact of government regulation on competition and consumers.

a. Bureau of Compliance b. National Advertising Review Board c. Bureau of Reconstruction d. Bureau of Economics e. Trade Regulation Bureau D

Which of the following statements is true of the Children's Advertising Review Unit (CARU)?

a. CARU recognizes that the special nature and needs of a youthful audience require particular care and diligence on the part of advertisers. b. CARU discourages advertising and marketing in the electronic retailing industry that contains unsubstantiated claims c. CARU's activities include the review and evaluation of child-directed advertising in broadcast media exclusively. d. CARU's self-regulatory guidelines for Children's Advertising are restricted to truthfulness and accuracy to address children's developing cognitive abilities. e. The majority of claims reviewed under the CARU program are for direct-response TV ads including long and short term form infomercials aimed at children. A

Advertising practices considered unfair include

a. Claims that might exploit children and older adults b. Statements that are misunderstood by the public due to their lack of knowledge c. Claims made with prior substantiation d. Trade practices that could reasonably be avoided by customers e. Inclusion of irrelevant information in ads A

The Network Advertising Initiative (NAI) is a

a. Industry-wide code that prohibits telemarketing calls after midnight and before 6 a.m. b. Self-regulatory code developed by companies that collect internet usage data c. Advisory board for the National Advertising Division d. Industry-developed code to monitor advertising to children e. Tobacco-industry group that wants to modify regulations against advertising of its products B

No commercial can run without approval from a network's _________ department.

a. Standards and Practices b. Better Business Bureau c. National Review Board d. Children's Advertising Review Unit e. Food and Drug Administration A

Which of the following statements is true of the use of puffery?

a. The use of puffery in ads is common b. The act of puffery does apply to sales presentations c. Firms that are found guilty of the use of puffery are banned from using that particular medium. d. Puffery is the inclusion of objective options in ads e. Most state governments have banned the use of puffery in television ads. A

The __________ empowers the federal trade commission (FTC) to issue a cease-and-desist order.

a. Warner-Lambert Act b. Organization for Economic CO-operation and Development Consumer Policy Toolkit c. International Consumer Protection and Enforcement Network d. Wheeler-Lea Amendment e. Children's Televisions Act D

Which of the following is a federal agency that controls advertising?

a. children's advertising review unit b. national advertising review board c. better business bureau d. food and drug administration e. national review board D

Mars Inc. includes the disclaimer "Warning! This product has not been pasteurized and must be used with caution" on all its juice products. This inclusion is an example of...

a. deceptive advertising b. puffery c. advertising substantiation d. affirmative disclosures e. consent orders D

Th Advertising Self-Regulatory Council mission is to

a. increase television advertising in remote area of the US b. Sustain high standards of truth and accuracy in national advertising c. Ensure that no surrogate advertising is used for the advertising of tobacco products d. Ensure that all kinds of promotional media are used equally for advertising purposes e. Promote internet and interactive advertising B

The DISCUS ban, which effectively banned hard liquor ads on national tv for five decades, is an example of

a. industry regulation b. government oversight c. government regulation d. industry self-regulation D