CHT 20

43. Retail Stores Inc. pays taxes collected by the appropriate state agencies. Like other state administrative agencies, these agencies were created by a. a state legislature, through an enabling act. b. a state court, through the adjudicatory process. c. a federal administrative agency, through administrative regulations. d. the state governor, through an executive order.

ANSWER: a

44. Persons who favor the creation of a federal agency to regulate the production of genetically modified agricultural products should concentrate their lobbying efforts on a. Congress. b. administrative agencies that oversee agricultural products. c. the United States Supreme Court. d. the president of the United States.

ANSWER: a

45. The rules of administrative agencies can be a. as binding as laws passed by Congress. b. only as persuasive as experts' opinions. c. merely as suggestive as media commentary. d. no more influential than promotional puffery.

ANSWER: a

46. The executive branch of the government can exercise control over an administrative agency through a. the president's veto powers. b. legislation that takes away the agency's power. c. judicial review of agency actions and decisions. d. none of the choices.

ANSWER: a

48. Delta Water Company is subject to a decision by the Environmental Protection Agency. Delta appeals the decision, arguing that it is arbitrary and capricious. This could mean that the decision a. changed the agency's prior policy without justification. b. followed a consideration of all legally appropriate factors. c. was accompanied by a rational explanation. d. was plainly warranted by the evidence.

ANSWER: a

59. The Food and Drug Administration (FDA) is investigating reports that Caplets Corporation is putting potentially harmful additives in Doze, a new pain-relief medication. The FDA's demands for particular documents from Caplets a. must be specific and adequately describe the material being sought. b. must not be specific or an incriminating item might be overlooked. c. must be general so as to force an uncooperative party's compliance. d. may, but need not, be specific because this is only an investigation.

ANSWER: a

62. The Federal Emergency Management Agency (FEMA) discovers that Rescue Inc. is violating a FEMA regulation. If this situation is resolved like most such disputes, the outcome will be a. a negotiated settlement. b. a trial and a fine. c. a trial and an appeal to a higher authority. d. a trial and the dissolution of the business.

ANSWER: a

63. The Environmental Protection Agency (EPA) discovers that Fish Farm Inc. has violated an EPA regulation. If no settlement is reached, the EPA can a. issue a formal complaint. b. do nothing. c. take the matter to the U.S. Supreme Court. d. immediately impose sanctions.

ANSWER: a

64. A proceeding in which an administrative law judge hears and decides issues that arise when an agency charges a person or a firm with an agency violation is a. adjudication. b. declaration. c. rulemaking. d. investigation.

ANSWER: a

66. To be assured that a court will defer to an administrative agency's interpretation of the law, the agency must a. meet the formal legal standards for notice-and-comment rulemaking. b. exhaust all administrative remedies. c. make its records available online and in other electronic formats. d. open every portion of every meeting to public observation.

ANSWER: a

67. A failure of the Federal Bureau of Investigation to comply with a request under the Freedom of Information Act (FOIA) may be challenged in a. a federal district court. b. a hearing before the U.S. Freedom of Information Agency. c. a meeting with Congress's FOIA subcommittee. d. a special conference with the president of the United States.

ANSWER: a

39. Independent regulatory agencies such as the Federal Communications Commission are a. not part of the government's executive branch. b. outside the federal executive departments. c. subagencies within the cabinet departments. d. cabinet departments within the executive branch.

ANSWER: b

40. The Food and Drug Administration (FDA) is an executive agency. As an executive agency, the FDA is subject to the authority of a. no government official or entity. b. the president. c. state legislatures. d. the U.S. Attorney General

ANSWER: b

58. The Securities and Exchange Commission (SEC) wants to review certain documents of Trade Funds Inc. Whether it is permissible for the SEC to request or review the documents depends on whether the documents are a. incriminating. b. relevant. c. technical. d. valuable.

ANSWER: b

61. Administrative agencies can conduct searches without warrants in a. all industries. b. highly regulated industries. c. no industries. d. newly regulated industries only.

ANSWER: b

68. Media Report seeks information about well-known businesspersons under the Freedom of Information Act. To obtain the information, Media Report must a. agree not to reveal any trade secrets. b. reasonably describe the information. c. get a court order. d. obtain the businesspersons' consent.

ANSWER: b

41. The Federal Trade Commission Act granted the Federal Trade Commission the power to a. oversee the nation's stock exchanges. b. regulate specific areas of business and industry. c. prevent businesses from engaging in unfair trade practices. d. work to eliminate discrimination in skilled occupations.

ANSWER: c

47. Bath & Kitchen Inc. is subject to a decision by the Consumer Product Safety Commission. Opposed to the decision, the firm wants a court to review it. First, however, the firm must a. refuse to comply with the agency decision. b. petition other interested parties to oppose the decision. c. exhaust all possible administrative remedies. d. publish its opposition in the Federal Register.

ANSWER: c

49. The procedures used by administrative agencies in fulfilling their basic functions is known as a. the procedural process. b. the legislative process. c. the administrative process. d. the executive process.

ANSWER: c

50. The Securities and Exchange Commission decides to create a new rule relating to the dissemination of material nonpublic information through social media. The first step is a. compile the rule with others in the Code of Federal Regulations. b. draft the rule. c. publish a notice of the proposed rulemaking. d. solicit public comment.

ANSWER: c

52. To notify the public of a proposed rule, the Federal Emergency Management Agency, like other federal agencies, publishes the proposal a. through a broadcast on a public television station. b. in a trade journal available to members of the industry. c. in the Federal Register. d. on its website.

ANSWER: c

54. After a final rule is issued, an administrative agency conducts investigations to monitor a. consumer satisfaction with the rule. b. affected businesses' satisfaction with the rule. c. compliance with the rule. d. the impact of the rule on other administrative agencies.

ANSWER: c

55. Tim is a witness in a controversy involving the U.S. Bureau of Tobacco and Firearms. Tim can be compelled to appear before an administrative law judge if he is served with a. an order for specific performance. b. an executive order. c. a subpoena. d. a search warrant.

ANSWER: c

51. Notice-and-comment rulemaking involves a period during which a. judges, legislators, and the president are asked about a proposed rule. b. potential violators of a proposed rule are notified and publicized. c. the administrators "notice" a problem and "comment" on it. d. the public is asked to comment on a proposed rule.

ANSWER: d

53. A final rule issued through a notice-and-comment rulemaking procedure has binding legal effect a. after a court affirms it. b. until the issuing agency rescinds it. c. once Congress approves it. d. unless a court overturns it.

ANSWER: d

56. The Environmental Protection Agency (EPA) wants Waste Disposal Company to produce certain records for review. The EPA can gain access to the records through a. an order for specific performance. b. a rule for parol evidence. c. a formal complaint. d. a subpoena.

ANSWER: d

57. The Federal Trade Commission (FTC) orders General Sales Company to reveal certain information. The firm complains to a court, arguing that the order is an abuse of the FTC's discretion. Like other agencies, the FTC can use a subpoena to a. compel a party to testify, but not to obtain documents. b. obtain any information except what a party refuses to reveal. c. harass an uncooperative business or individual. d. reveal regulatory violations.

ANSWER: d

60. The Food and Drug Administration (FDA) wants Pharma Inc. to produce certain records for review. Pharma need not reveal a. incriminating information. b. files that are not otherwise required by law. c. facts that could be used against the firm in a court. d. trade secrets.

ANSWER: d

65. During an administrative hearing, the parties may a. give testimony. b. present evidence. c. cross-examine witnesses. d. all of the choices.

ANSWER: d

69. The U.S. Small Business Administration issues a new regulation that will have a significant impact on a substantial number of small businesses. Under the Regulatory Flexibility Act, the agency must do all of the following except a. measure the cost that the rule will impose on small businesses. b. consider less burdensome alternatives. c. alert small businesses about forthcoming regulations. d. adjust the rule to the satisfaction of the regulated businesses.

ANSWER: d

70. Closed meetings of the U.S. Bureau of Land Management, a federal administrative agency, are permitted when a. the subject of the meeting concerns accusing a person of a crime. b. open meetings would frustrate the implementation of future actions. c. the subject of the meeting involves matters relating to future rulemaking. d. all of the choices.

ANSWER: d

36. The Financial Stability Oversight Council was created in response to a financial crisis to a. identify and respond to emerging risks in the financial system. b. protect consumers from abusive practices by financial institutions. c. issue rules to cover almost every aspect of a business's operation. d. reduce the number and authority of business financial regulations.

ANSWER: a

37. Organic Frozen Foods Corporation is subject to regulations issued by the Food and Drug Administration, which is a federal agency. These regulations are part of the body of a. administrative law. b. legislative law. c. executive law. d. judicial law.

ANSWER: a

38. When a state administrative regulation conflicts with a federal administrative regulation a. the federal regulation takes precedence. b. the state regulation takes precedence. c. a cost-benefit analysis is applied to determine which takes precedence. d. the regulations are equally valid within their jurisdictions.

ANSWER: a

42. Data Inc. pays income and other taxes collected by the Internal Revenue Service (IRS). Like other federal administrative agencies, the IRS was created by a. Congress, through enabling legislation. b. a court, through the adjudicatory process. c. an administrative agency, through administrative regulations. d. the president, through an executive order.

ANSWER: a