Ch 20
The courts have extended First Amendment protection to A. commercial speech, a speech that promotes a commercial transaction. B. advertisers to enable them to sue the media for not providing them with the promised reach and frequency. C. the findings of marketing research studies. D. advertisers who want to use delusory wording in their ads. E. advertisers who do not want to be self-regulated.
A. commercial speech, a speech that promotes a commercial transaction.
Certain magazines regularly test the products they advertise and offer a "seal of approval" and refunds if the products are later found to be defective. They do so in order to A. enhance the credibility of the publication. B. encourage advertisers to buy more media space. C. eliminate puffery in their ads. D. discourage comparative advertising. E. avoid questionable advocacy advertising.
A. enhance the credibility of the publication.
Better Business Bureaus (BBBs) provide effective control over advertising practices at the _____ level. A. local B. national C. global D. industry-wide E. international
A. local
The key elements in the Federal Trade Commission's (FTC's) definition of deception are that the representation, omission, or practice must be likely to mislead the reasonable consumer and that it must have A. materiality. B. selective exposure. C. selective retention. D. puffery. E. peripheral importance.
A. materiality.
The Council of Better Business Bureaus plays a major role in controlling advertising practices at the _____ level. A. national B. local C. manufacturer D. international E. regional
A. national
Local Better Business Bureaus (BBBs) A. receive and investigate complaints from consumers regarding advertising in their area. B. are located in small cities throughout the United States with populations less than 200,000. C. are government-aided agencies. D. follow a standard operating procedure for handling complaints as implemented by the Federal Trade Commission. E. are funded by the Council of Better Business Bureaus.
A. receive and investigate complaints from consumers regarding advertising in their area.
According to Federal Trade Commission (FTC) policy, the basis for determining _____ is that a trade practice causes substantial physical or economic injury to consumers, could not reasonably be avoided by consumers, and must not be outweighed by countervailing benefits to consumers or competition. A. unfairness B. deception C. puffery D. affirmative disclosure E. cease-and-desist orders
A. unfairness
A(n) _____ is an agreement to stop the practice or advertising in question, is for settlement purposes only, and does not constitute an admission of guilt by an advertiser. A. cease-and-desist order B. consent order C. ad substantiation agreement D. affirmative disclosure order E. injunction
B. consent order
If a participant is required to give up something of value in order to participate in a game or sweepstakes, then _____ is present, and the promotion is considered a lottery. A. misrepresentation B. consideration C. deception D. enticement E. remuneration
B. consideration
Under its affirmative disclosure requirement, the Federal Trade Commission (FTC) may require advertisers to include certain types of information in their ads so that A. consumers can substantiate the claims made for their product or service. B. consumers will be aware of all the consequences and limitations associated with the use of a product or service. C. consumers' choice or conduct with regard to a product or service will remain unaffected. D. consumers can distinguish exaggeration or inflated claims in advertising and also recognize puffery. E. consumers can easily understand any technical data or information provided.
B. consumers will be aware of all the consequences and limitations associated with the use of a product or service.
The goal of affirmative disclosure is to A. avoid ads that might be offensive or misleading to consumers. B. give consumers sufficient information to make an informed decision. C. protect advertisers from suits involving accuracy of advertising claims. D. restrict the content of attorney ads and necessitate a disclaimer. E. enhance consumer confidence in advertisements.
B. give consumers sufficient information to make an informed decision.
The Federal Trade Commission (FTC) and U.S. Postal Service have rules that govern the use of _____ plans whereby a company proposes to send merchandise to consumers and expects payment unless a consumer sends a notice of rejection or cancellation. A. unsolicited order B. negative option C. contradictory option D. FALSE substitution E. unsubstantiated order
B. negative option
The use of superlatives such as "greatest," "best," and "finest" in advertising would constitute A. an unfair claim. B. puffery. C. deception. D. an affirmative disclosure. E. advertising substantiation.
B. puffery.
Which of the following statements describes the media's role in the self-regulation of advertising? A. The media must accept all the advertising campaigns they receive because of the First Amendment that guarantees the freedom of speech. B. The media cannot refuse to accept advertising for an entire product class such as hard liquor. C. The media can refuse to accept individual ads they find offensive or objectionable. D. The media is expected to reject ads that are targeted toward children and older adults. E. The broadcast is required by law to reject political ads.
C. The media can refuse to accept individual ads they find offensive or objectionable.
Under the original Federal Trade Commission Act of 1914, the FTC A. was given the power to issue cease-and-desist orders against firms engaging in deceptive practices. B. was given the power to pursue corrective advertising remedies to deceptive practices. C. could not prohibit FALSE advertising unless there was evidence of injury to a competitor. D. was given the power to regulate all FALSE and deceptive advertising practices that might injure competition or mislead consumers. E. could not enforce antitrust laws or protect major competitors from one another.
C. could not prohibit FALSE advertising unless there was evidence of injury to a competitor.
According to the Federal Trade Commission's (FTC's) definition of deception, a representation, omission, or practice has materiality if it A. is seen by a substantial number of consumers leading to significant injury. B. can be decoded to have several different meanings. C. is likely to influence consumers' purchase decisions. D. uses superlatives and can be substantiated. E. can influence the consumers' decision-making process in a detrimental way.
C. is likely to influence consumers' purchase decisions.
Scrumptious Inc., an American food and beverages company, claims that "Scrumptious makes the world's best chocolate frosting." This is an example of A. sales promotion. B. superiority advocacy. C. puffery. D. comparative advertising. E. trickery.
C. puffery.
If an advertiser refuses to comply with rulings made by the National Advertising Review Board (NARB), the NARB is most likely to A. order the advertiser to stop running the ad. B. refer the case to an industry trade association. C. refer the matter to an appropriate federal agency. D. impose a fine. E. lodge a class action suit for customers who have been in some way negatively affected by the ad.
C. refer the matter to an appropriate federal agency.
The _____ gave the Federal Trade Commission (FTC) the power to issue cease-and-desist orders and levy fines on violators. A. Central Hudson Test B. National Advertising Review Board C. Lanham Act D. Wheeler-Lea Amendment E. Sherman Antitrust Act
D. Wheeler-Lea Amendment
A very frustrating, and often expensive, scenario for both an agency and its client occurs when A. a commercial is rejected at the storyboard stage. B. a commercial that was rejected at the storyboard stage is accepted at the final stage. C. a commercial is rejected for reasons such as sex, politics, and religion. D. a commercial is approved at the storyboard stage but then is rejected after it is produced. E. a commercial is rejected at the idea-generation stage.
D. a commercial is approved at the storyboard stage but then is rejected after it is produced.
The three major participants in the advertising process that work individually and collectively to encourage truthful, ethical, and responsible advertising are A. advertisers, advertising review boards, and the cable operators. B. creative boutiques, copywriters, and consumer panels. C. consumer panels, advertisers, and agencies. D. advertisers, advertising agencies, and the media. E. advertisers, the government, and the television networks.
D. advertisers, advertising agencies, and the media.
In 1971, the Federal Trade Commission's (FTC's) _____ program required advertisers to have supporting documentation for their claims and to prove the claims are truthful. A. Central Hudson B. Lanham C. cease-and-desist D. advertising substantiation E. affirmative disclosure
D. advertising substantiation
The Federal Trade Commission's (FTC's) advertising substantiation program now requires advertisers to substantiate their claims A. within one month of the appearance of an ad. B. if an ad does not provide sufficient information to consumers so as to make an informed decision. C. if an ad uses puffery. D. before an ad appears. E. if an ad runs for more than six months.
D. before an ad appears.
The Federal Trade Commission (FTC) program that requires an advertiser who is found guilty of deceptive advertising to run additional advertising to remedy the deception or misinformation contained in previous ads is known as A. the fairness doctrine. B. ad substantiation. C. affirmative disclosure. D. corrective advertising. E. the puffery dogma.
D. corrective advertising.
Self-regulation begins with the interaction of client and agency when A. a consent order is signed. B. a company is charged with a lawsuit for deceptive advertising. C. there has been an omission of advertising substantiation. D. creative ideas are generated and submitted for consideration. E. ads are aired in foreign nations.
D. creative ideas are generated and submitted for consideration.
The three major divisions of the Federal Trade Commission (FTC) are the bureaus of A. employment, national security, and trade. B. governance, compliance, and cooperation. C. regulation, restriction, and economic reconstruction. D. economics, consumer protection, and competition. E. distribution, distillation, and consumer diversity.
D. economics, consumer protection, and competition.
The Federal Trade Commission's (FTC's) advertising substantiation program has had a major effect on the advertising industry because A. it simplified the advertising decision-making process. B. it led to fewer liability litigations involving products that are associated with consumer injuries. C. it enabled advertisers to make accurate advertising claims. D. it shifted the burden of proof from the commission to the advertiser. E. it increased consumer confidence in all advertising claims.
D. it shifted the burden of proof from the commission to the advertiser.
According to the Federal Trade Commission (FTC), _____ occurs when qualifying information necessary to prevent a practice, claim, representation, or reasonable belief from being misleading is not disclosed. A. misinterpretation B. affirmative disclosure C. coercion D. misleading omission E. fraud
D. misleading omission
The Federal Trade Commission (FTC) defines _____ as an express or implied statement contrary to fact. A. selective exposure B. affirmative disclosure C. selective retention D. misrepresentation E. comparative disclosure
D. misrepresentation
Television advertising is A. typically not used for hard liquor advertising. B. regulated through codes developed and enforced by the Federal Trade Commission. C. regulated by affiliate networks. D. more stringently self-regulated than any other medium. E. considered a declining advertising medium.
D. more stringently self-regulated than any other medium.
Esme Inc., a manufacturer of cosmetics, ran an ad campaign in which it claimed that Esme's "Vivid" range of water-proof mascara is the best mascara in the world. It also claimed that the mascara gives 10 times more volume to the eyelashes and provides more definition to the eyes than any other mascara brand. This scenario is an illustration of A. deception. B. superlative advertising. C. unfairness. D. puffery. E. unethical advertising.
D. puffery.
Regulatory concerns never play a major role in the advertising decision-making process.
FALSE
Self-regulation of advertising has been ineffective in the development of stringent practices and standards.
FALSE
The Central Hudson Test is a two-part test established by the American Marketing Association.
FALSE
The Federal Trade Commission (FTC) is responsible for protecting businesses, but not consumers, from anticompetitive behavior and unfair and deceptive practices.
FALSE
The Wheeler-Lea Act withdrew the Federal Trade Commission's (FTC's) power to regulate advertising.
FALSE
Trade-oriented promotions are not subject to regulations by various agencies.
FALSE
In 2014, _____________________ changed its policy to prohibit marketers from "like-gating" a page to gain access to content or enter a contest. A. Facebook B. Snapchat C. LinkedIn D. Twitter E. Pinterest
A. Facebook
The _____ of the Council of Better Business Bureaus focuses on areas that include product performance claims, superiority claims against competitive products, and all kinds of scientific and technical claims made in countrywide advertising. A. National Advertising Division B. National Review Board C. National Association of Attorneys General D. American Marketing Association E. Federal Trade Commission
A. National Advertising Division
Which of the following statements concerning advertising by attorneys is TRUE? A. The right for attorneys to advertise is protected under the First Amendment. B. The U.S. Supreme Court does not permit lawyers to advertise if they earn more than $100,000 per year. C. Ads soliciting personal injury victims help in enhancing the public's perception of attorneys. D. The American Bar Association recently removed all restrictions on the type of advertising attorneys can use. E. Typically, traditional law firms are in favor of using advertising, particularly on TV, because they believe that it might boost a profession's image.
A. The right for attorneys to advertise is protected under the First Amendment.
The _____ has control over advertising involving the use of the mail and ads that involve lotteries, obscenity, or fraud. A. U.S. Postal Service B. Federal Communications Commission C. National Association of Attorneys General D. Federal Trade Commission E. U.S. Department of Welfare
A. U.S. Postal Service
In the Supreme Court's 1996 decision in , the court ruled that A. advertising alcoholic beverage prices is okay because commercial speech is protected under the First Amendment. B. advertising the prices of prescription drugs is okay because commercial speech is protected under the First Amendment. C. misleading or deceptive commercial speech is protected. D. political speech guidelines are stricter than commercial speech guidelines. E. the free flow of information depends on self-regulation.
A. advertising alcoholic beverage prices is okay because commercial speech is protected under the First Amendment.
Advertisers are often supportive of voluntary self-regulation because A. self-regulation is viewed as a way of limiting government interference in advertising. B. all clients and agencies are affected by voluntary self-regulation. C. self-regulation does not require interaction between an agency and a client. D. self-regulation results in even more stringent regulations than what state and federal agencies want. E. it is simple and less time consuming.
A. self-regulation is viewed as a way of limiting government interference in advertising.
Over the past decade the FTC has focused its attention on the enforcement of existing regulations in areas such as A. telemarketing and Internet privacy. B. magazines and newspapers. C. infomercials and video on demand. D. radio and television. E. public relations and publicity.
A. telemarketing and Internet privacy.
Which of the following divisions of the Federal Trade Commission (FTC) deals with antitrust and consumer protection investigations? A. the Bureau of Economics B. the Bureau of Compliance C. the National Advertising Review Board D. the Bureau of Reconstruction E. the Trade Regulation Bureau
A. the Bureau of Economics
In 2009, ____________________ ordered Bayer to run a six-month, $20 million corrective advertising campaign for Yaz birth control because its marketing and advertising made FALSE claims. A. the FDA B. the FTC C. the US Post Office D. the FCC E. the Supreme Court
A. the FDA
Which of the following is an important early development in state regulation that is used in 44 states as a basis for advertising regulation? A. the model statutes B. the Better Business Bureau guidelines C. the Wheeler-Lea Amendment D. Consortium of Trade Association's regulations E. Fifth Amendment rectifications
A. the model statutes
Which of the following statements is TRUE of the National Advertising Division (NAD)? A. The NAD's advertising monitoring program only reviews complaints from local Better Business Bureaus. B. Advertisers that disagree with the NAD's findings have an automatic right to appeal the NAD's decision to the National Advertising Review Board. C. The NAD has no authority to direct an advertiser to stop running an ad in case the required substantiating evidence does not support the advertiser's claim. D. Lawyers at the NAD usually seek help from local advertising agencies to find misleading advertisements. E. The NAD does not deal with complaints that come from marketers who are threatened by comparative advertising.
B. Advertisers that disagree with the NAD's findings have an automatic right to appeal the NAD's decision to the National Advertising Review Board.
The _____ plays a major role at the national level as the third-party administrator of the advertising industry self-regulatory system. A. National Advertising Review Board B. Council of Better Business Bureaus C. American Marketing Association D. Federal Trade Commission E. National Advertising Review Council
B. Council of Better Business Bureaus
Gretchen received information that an ad her team worked on for a client was not being allowed to air because it was profane and in poor taste. Which agency has the authority to purge ads that are profane, deceptive, or misleading? A. FDA B. FCC C. US Post Office D. ATF E. Supreme Court
B. FCC
The _____ is a federal agency that was founded in 1934 to regulate broadcast communication and that has jurisdiction over the radio, television, telephone, and telegraph industries. A. Federal Trade Commission B. Federal Communications Commission C. Fairness Doctrine D. U.S. Postal Service E. National Association of Broadcasters
B. Federal Communications Commission
The _____ was formed by three advertising associations and the Council of Better Business Bureaus to sustain high standards of truth and accuracy in national advertising. A. National Advertising Board B. National Advertising Review Council C. American Association of Advertisers D. Ad Council E. Board of Advertising Ombudsmen
B. National Advertising Review Council
Which of the following sentences is TRUE of the Better Business Bureau (BBB)? A. The BBB is a federal regulatory agency that controls advertising. B. The BBB promotes fair advertising and selling practices across all industries. C. The BBB was established to handle client complaints about regional business practices. D. The BBB is regulated by the American Marketing Association. E. Local BBBs are located in only two cities across America.
B. The BBB promotes fair advertising and selling practices across all industries.
Wagner Tire, a manufacturer of tires, is developing an advertising campaign that is set to claim that cars using its new RX model stop 25 percent faster on wet surfaces when compared to other brands of tires. The company must conduct careful studies to provide support for the claim because A. the Federal Trade Commission may sue Wagner for comparative advertising. B. Wagner's competitors may sue the company under the Lanham Act if it cannot substantiate its claims. C. the Better Business Bureau may sue Wagner if it cannot substantiate its claims. D. the Federal Trade Commission may charge Wagner for using puffery, which is an illegal form of advertising. E. the consumers may sue the company for the nonsubstantiation of the ad.
B. Wagner's competitors may sue the company under the Lanham Act if it cannot substantiate its claims.
Under the Children's Television Act, A. advertising aimed at children is prohibited. B. advertising during children's programming is limited to 12 minutes an hour on weekdays. C. broadcasters are required to provide time for opposing viewpoints on important issues. D. advertisers do not have restrictions on the amount of advertising aimed at children. E. the Federal Communications Commission (FCC) possesses the right to fine advertisers who exceed advertising limits as defined by the act.
B. advertising during children's programming is limited to 12 minutes an hour on weekdays.
The Federal Trade Commission (FTC) requires advertising for any product that is sweetened with saccharin to contain a warning that it may be hazardous to one's health. This requirement falls under the FTC's _____ requirement. A. misleading omission B. advertising substantiation C. elimination of puffery D. cease-and-desist E. materiality
B. advertising substantiation
Commercial speech is most accurately defined as A. an encoding and decoding tool for commercial communications. B. communication that promotes a commercial transaction. C. a type of comparative advertising used in TV commercials. D. an advertising component of broadcast media. E. speech governed by the Fifth Amendment to the U.S. Constitution.
B. communication that promotes a commercial transaction.
A study by the Children's Advertising Review Unit (CARU) found that the most prevalent violation of its voluntary advertising guidelines occurred with _____ aimed at children. A. rebates and refunds B. premiums C. trade allowances D. discounts E. contests and sweepstakes
B. premiums
Snapple's claim that its beverages are "made from the best stuff on Earth" is an example of A. an unfair claim. B. puffery. C. deception. D. an affirmative disclosure. E. advertising substantiation.
B. puffery.
Which of the following factors does the Federal Trade Commission (FTC) consider in evaluating an ad for deception? A. presence of superlative words in the advertisement B. significant omissions of important information C. lack of selective disclosure D. presence of puffery in the advertisement E. violation of trade regulation rule
B. significant omissions of important information
Which of the following statements is TRUE of a consent order? A. The signing of a consent order constitutes an admission of guilt by an advertiser. B. If an advertiser refuses to sign a consent order, the inquiry is handed to the U.S. Department of Justice. C. A consent order is for settlement purposes only. D. A consent order prohibits an advertiser from making a specified advertising claim for 30 days. E. A consent order leads to adverse publicity.
C. A consent order is for settlement purposes only.
Which of the following is the best example of the use of puffery in advertising? A. A bank advertises free checking with a minimum balance of $1,000. B. A tire manufacturer advertises a 50,000-mile guarantee for its tires. C. A manufacturer of premium chocolates claims that it makes the finest chocolates in the world. D. A popular shampoo brand advertises that it has been proven to be effective in preventing dandruff. E. A provider of courier services advertises guaranteed overnight delivery service.
C. A manufacturer of premium chocolates claims that it makes the finest chocolates in the world.
The _____ is a major trade association of the advertising business in the United States and has established standards of practice and its own creative code. A. Vision Council of America B. Independent Business Alliance C. American Association of Advertising Agencies D. Federal Trade Commission E. National Association of Broadcasters
C. American Association of Advertising Agencies
A number of self-regulatory mechanisms have been established by the business community in an effort to control advertising practices, and among them, the largest and best known is the A. Federal Trade Commission. B. Federal Communications Commission. C. Better Business Bureau. D. World Trade Organization. E. Chamber of Deputies.
C. Better Business Bureau.
The _____ regulates and controls the advertising of alcoholic beverages. A. Federal Commission for Substance Abuse Control B. Food, Alcohol, and Drug Administration C. Bureau of Alcohol, Tobacco, Firearms and Explosives D. Federal Trade Commission E. National Association of Attorneys General
C. Bureau of Alcohol, Tobacco, Firearms and Explosives
The origin of the Federal Trade Commission's (FTC's) corrective advertising program came from a deceptive advertising case involving A. Listerine. B. Ocean Spray Cranberry Juice. C. Campbell Soup. D. STP Corporation. E. McDonald's.
C. Campbell Soup.
The __________determined that POM Wonderful LLC had made unsubstantiated claims about the health benefits of its pomegranate juice. A. FTC B. FCC C. FDA D. ATF E. BBB
C. FDA
Many areas of sales promotions are regulated by the _____ through the Marketing Practices Division of the Bureau of Consumer Protection. A. Federal Communications Commission B. Food and Drug Administration C. Federal Trade Commission D. U.S. Justice Department E. Promotional Products Marketing Association
C. Federal Trade Commission
Under the Obama administration, Congress was asked to grant the _________________ increased powers to protect consumers from financial services and products. A. Federal Communications Commission B. Food and Drug Administration C. Federal Trade Commission D. U.S. Justice Department E. Promotional Products Marketing Association
C. Federal Trade Commission
Roberto's, a pizzeria, claimed in its print and television ads that its pizza was made from the best ingredients and tasted better than Pacifix Crust's pizzA. Pacifix Crust can launch a civil suit against Roberto's for FALSE and misleading advertising under the _____ Act. A. Federal Trade Commission B. Wheeler-Lea C. Lanham D. Robinson-Patman E. Clayton Antitrust
C. Lanham
The _____ is a government regulation that is increasingly being used by companies for filing lawsuits against competitors they believe are making FALSE claims. A. Federal Trade Commission Act B. Wheeler-Lea Amendment C. Lanham Act D. Robinson-Patman Act E. Clayton Antitrust Act
C. Lanham Act
Policies and procedures for self-regulation of the advertising industry are established by the A. National Association of Broadcasters. B. Vision Council of America. C. National Advertising Review Council. D. Independent Business Alliance. E. Association of American Publishers.
C. National Advertising Review Council.
Marketers' use of trade allowances is controlled by the _____, which prohibits price discrimination. A. Federal Trade Commission Act B. Lanham Act C. Robinson-Patman Act D. FDA Act E. Wheeler-Lea Amendment
C. Robinson-Patman Act
Which of the following is the appellate unit of the Advertising Self-Regulatory Council? A. The National Advertising Division B. The Independent Business Alliance C. The National Advertising Review Board D. The American Marketing Association E. The National Association of Broadcasters
C. The National Advertising Review Board
In 1977, the _____ held that state bar associations' restrictions on advertising are unconstitutional and that attorneys have First Amendment freedom of speech rights to advertise. A. Federal Trade Commission B. American Bar Association C. U.S. Supreme Court D. Better Business Bureau E. American Marketing Association
C. U.S. Supreme Court
The _____ empowered the Federal Trade Commission to regulate unfair or deceptive practices in commerce including those in advertising. A. Lanham Amendment B. Sherman and Clayton Antitrust Act C. Wheeler-Lea Amendment D. Food and Drug Administration Act E. Consumer Protection Act
C. Wheeler-Lea Amendment
Under the Wheeler-Lea Amendment, the Federal Trade Commission (FTC) is empowered to stop an advertiser from making a specified claim within 30 days and prohibit the advertiser from engaging in the objectionable practice until after a hearing is held. This is known as A. a consent order. B. injunctive power. C. a cease-and-desist order. D. corrective advertising. E. advertising substantiation.
C. a cease-and-desist order.
Cease-and-desist orders A. are used to regulate public service announcements. B. require an advertiser to run comparative advertisements. C. are issued by the Federal Trade Commission. D. are made legally binding by the Robinson-Patman Act. E. do not impose punishments upon violation.
C. are issued by the Federal Trade Commission.
The Federal Trade Commission (FTC) takes the position that A. consumers cannot distinguish between factual information and puffery. B. puffery has a detrimental effect on consumers' purchase decisions. C. consumers recognize puffery and don't believe it. D. puffery is illegal under the Wheeler-Lea Act. E. consumers believe in puffery.
C. consumers recognize puffery and don't believe it.
Raiment Sportswear, a clothing manufacturer specializing in sportswear, has developed a "Super Bowl Sweepstakes" that it plans to promote during the football post-season. To avoid having this promotion classified as a lottery, Raiment should A. not make premium offers to special audiences such as children. B. offer only merchandise and no cash as part of the sweepstakes prizes. C. not require that consumers make a purchase of one of their products as a condition for entering the sweepstakes. D. run the promotion only in the state where the Super Bowl is being held. E. avoid comparative advertising.
C. not require that consumers make a purchase of one of their products as a condition for entering the sweepstakes.
A promotion such as a contest or sweepstakes can avoid being considered a lottery by A. conducting the contest or sweepstake only at the regional level and not national level. B. providing full disclosure. C. not requiring consideration to be present. D. publishing the odds of winning. E. ensuring puffery is avoided in advertisements.
C. not requiring consideration to be present.
Which of the following agencies is responsible for tax collection for the liquor industry? A. the Federal Commission for Substance Abuse Control B. the Food and Drug Administration C. the Bureau of Alcohol, Tobacco, Firearms and Explosives D. the Federal Trade Commission E. the National Association of Attorneys General
C. the Bureau of Alcohol, Tobacco, Firearms and Explosives
The _______________ was established as part of the 1998 tobacco settlement and is dedicated to reducing tobacco use. A. Direct Marketing Reform Agency B. Telephone Consumer Protection Agency. C. Direct Selling Association. D. American Legacy Foundation. E. Federal Telemarketing Reform Agency
D. American Legacy Foundation.
The BBB is the largest and best known self-regulatory mechanism in the United States that has been established by the business community in an effort to control advertising practices. BBB stands for A. Board for Business Broadcasting. B. Board of the Best Businessmen. C. Board for Betterment of Broadcasting. D. Better Business Bureau. E. Best Business Bureau.
D. Better Business Bureau.
The _____ is the division of the Federal Trade Commission (FTC) that is responsible for investigating cases involving deceptive or misleading advertising. A. Bureau of Economics B. Bureau of Competition C. National Advertising Review Board D. Bureau of Consumer Protection E. Trade Regulation Bureau
D. Bureau of Consumer Protection
The _____ examines advertising claims in direct-response advertising, including infomercials and home shopping channels. A. Children's Advertising Review Unit B. Vision Council of America C. National Association of Broadcasters D. Electronic Retailing Self-Regulation Program E. Independent Business Alliance
D. Electronic Retailing Self-Regulation Program
Alyssa was asked to edit her team's testimonial ad so it would include a disclosure that said "results not typical." Which agency scrutinizes the use of testimonial ads and asks for this type of disclosure in situations where the outcomes vary substantially? A. US Post Office B. Supreme Court C. FCC D. FTC E. Trademark Registrars
D. FTC
Under the Reagan administration, the controversial _____, which required broadcasters to provide time for opposing viewpoints on important issues, was repealed on the grounds that it was counterproductive. A. Deception Doctrine B. Misinterpretation Dogma C. Affirmative Disclosure Doctrine D. Fairness Doctrine E. Substantiation Dogma
D. Fairness Doctrine
Under the _____, the Federal Communications Commission (FCC) required stations to run commercials about the harmful effects of smoking. A. Substantial Omission Doctrine B. Misinterpretation Doctrine C. Affirmative Disclosure Doctrine D. Fairness Doctrine E. Substantiation Doctrine
D. Fairness Doctrine
Federal regulation of advertising originated in 1914 with the passage of the _____ Act. A. Information Technology B. Advertising Self-Regulatory C. Federal Consumer Protection D. Federal Trade Commission E. Central Hudson
D. Federal Trade Commission
In 1996, President Clinton signed an executive order declaring that nicotine was an addictive drug and gave the _____ board jurisdiction to regulate the advertising of cigarettes and smokeless tobacco. A. U.S. Commission for Food and Drugs B. Federal Trade Commission C. Bureau of Alcohol, Tobacco, and Firearms D. Food and Drug Administration E. Tobacco Institute
D. Food and Drug Administration
_____, as defined by the First Amendment to the U.S. Constitution, is the most basic federal law governing advertising in the United States. A. Freedom of using any media vehicle B. Freedom to advertise C. Freedom to stop the airing of any advertisement D. Freedom of speech E. Freedom of press
D. Freedom of speech
The _____ is a self-regulatory program implemented by the Advertising Self-Regulatory Council (ASRC) that regulates online behavioral advertising (OBA) across the Internet. A. Internet Advertising Review Board B. Internet Retailing Self-Regulation Program C. Council of Better Business Bureaus D. Internet-Based Advertising Accountability Program E. Information Technology Act
D. Internet-Based Advertising Accountability Program
Garrett Inc., an oil retailer, claimed its Clear Index gasoline cleaned car engines, boosted mileage, and reduced pollution emissions better than any other gas. Vaughn Corp., an energy corporation, contended that its products were just as good as Garrett's. The _____ is likely to make it easier for Vaughn to sue Garrett for this perceived misrepresentation. A. Wheeler-Lea Amendment B. Federal Trade Commission Improvements Act C. Clayton Antitrust Act D. Lanham Act E. Competitor Trademark Act
D. Lanham Act
The _____ moved against a number of national advertisers as a result of inactivity by the Federal Trade Commission (FTC) during the Reagan administration. A. Better Business Bureau B. National Advertising Review Council C. National Advertising Review Board D. National Association of Attorneys General E. Federal Communications Commission
D. National Association of Attorneys General
Advertising on television and radio was initially regulated through codes developed by the _____ until the courts found that portions of its regulations were in restraint of trade. A. National Advertising Review Board B. Federal Trade Commission C. Federal Communications Commission D. National Association of Broadcasters E. Standards and Practices Division
D. National Association of Broadcasters
Which of the following statements is TRUE of online behavioral advertising (OBA)? A. OBA permits only those advertisements that provide detailed information about an advertiser's products and services. B. Companies engaged in OBA are monitored by the Federal Trade Commission (FTC). C. OBA is based on the seven Self-Regulatory Principles for Electronic Retailing. D. OBA uses information collected across multiple unaffiliated websites to predict a user's preferences. E. OBA is regulated by the Electronic Retailing Self-Regulation Program (ERSP).
D. OBA uses information collected across multiple unaffiliated websites to predict a user's preferences.
_____ has been legally defined as "advertising or other sales presentations which praise the item to be sold with subjective opinions, superlatives, or exaggerations, vaguely and generally, stating no specific facts." A. Deceptive advertising B. Unfairness C. Comparative advertising D. Puffery E. Affirmative disclosure
D. Puffery
Which of the following statements is TRUE of the Electronic Retailing Self-Regulation Program (ERSP)? A. The mission of the ERSP is to discourage advertising and marketing in the electronic retailing industry that contains comparative advertising. B. The majority of claims reviewed under the ERSP program are for online advertising, including search media optimization and social media marketing. C. The ERSP works under the scope of the Electronic Retailing Association (ERA) to create a predisposed self-regulatory system. D. Spam e-mails along with Internet pop-up ads that lead to further e-commerce are in the ERSP's purview as well as advertising on TV shopping channels. E. The ERSP is an initiative of the Federal Trade Commission (FTC) to work toward the self-regulation of electronic retailing.
D. Spam e-mails along with Internet pop-up ads that lead to further e-commerce are in the ERSP's purview as well as advertising on TV shopping channels.
Which of the following statements about self-regulation by media is TRUE? A. Most commercials once rejected cannot be rerun. B. Network standards regarding acceptable advertising have remained constant over the past 30 to 40 years. C. Advertising for contraceptives is completely banned on all networks since 1995. D. Television is probably the most carefully scrutinized of all forms of advertising. E. Network standards have become more stringent in response to competition from independent and cable stations.
D. Television is probably the most carefully scrutinized of all forms of advertising.
Which of the following statements is TRUE of the National Advertising Review Council (NARC)? A. Cases brought to NARC are subject to extensive publicity as compared to the cases brought to court. B. It is very expensive to get a case solved through NARC. C. The NARC takes longer to solve a case when compared to the Federal Trade Commission (FTC). D. The NARC can handle cases at a lower cost as compared to a court. E. The NARC is a government agency regulating advertising agencies.
D. The NARC can handle cases at a lower cost as compared to a court.
Which of the following statements is TRUE of policies and procedures established for industry self-regulation by the Advertising Self-Regulatory Council (ASRC)? A. The Children's Advertising Review Unit (CARU) reviews advertising directed to children between the ages of 12 and 16. B. The National Advertising Division of the Council of Better Business Bureaus (NAD) examines advertising claims in direct-response advertising. C. The Electronic Retailing Self-Regulation Program (ERSP) examines all advertising claims excluding infomercials and home shopping channels. D. The National Advertising Division of the Council of Better Business Bureaus (NAD) is staffed primarily by attorneys. E. The Electronic Retailing Self-Regulation Program (ERSP) reviews advertising claims that are local in scope.
D. The National Advertising Division of the Council of Better Business Bureaus (NAD) is staffed primarily by attorneys.
Which of the following statements is TRUE of advertising by members of professional associations? A. Both government regulatory agencies and consumer groups are against advertising by members of professional associations. B. Professional associations have always authorized advertising by their members on the basis that such promotional activities heighten members' professional status. C. Research has shown that consumers generally disfavor the use of professional advertising. D. The Supreme Court has ruled that professionals, such as dentists and physicians, have the right to advertise. E. Professional advertising is typically considered unethical and fraudulent.
D. The Supreme Court has ruled that professionals, such as dentists and physicians, have the right to advertise.
Which of the following statements is TRUE of self-regulation of advertising? A. Self-regulation of advertising is typically restricted to liquor and tobacco advertisements. B. Self-regulation was initially introduced to eliminate the problem of puffery. C. Self-regulation of advertising has led to the development of more lenient standards and practices than those imposed by the legislation. D. The advertising industry views self-regulation as an effective mechanism for controlling advertising abuses. E. The advertising industry prefers government intervention over self-regulation.
D. The advertising industry views self-regulation as an effective mechanism for controlling advertising abuses.
According to the Federal Trade Commission (FTC), _____ exists if there is a misrepresentation, omission, or practice that is likely to mislead the consumer acting reasonably in the circumstances to the consumer's detriment. A. puffery B. affirmative disclosure C. selective retention D. deception E. selective disclosure
D. deception
Which of the following divisions of the Federal Trade Commission (FTC) protects consumers from deceptive and unsubstantiated advertising and enforces the provisions of the FTC Act that forbid misrepresentation, unfairness, and deception in general advertising at the national and regional level? A. the Division of Consumer Advertising & Protection B. the Division of Advertising Broadcasts C. the Division of Marketing Practices D. the Division of Advertising Practices E. the Division of Economic Practices
D. the Division of Advertising Practices
Which of the following is a federal agency that controls advertising? A. the National Advertising Review Board B. the Better Business Bureau C. the National Advertising Review Council D. the Food and Drug Administration E. the National Association of Attorneys General
D. the Food and Drug Administration
Which of the following Federal Trade Commission (FTC) programs requires firms to verify the veracity of product information before making any advertising claims about the product? A. Corrective advertising B. Implied uniqueness C. Comparative advertising D. Affirmative disclosure E. Advertising substantiation
E. Advertising substantiation
The U.S. Supreme Court established the _____, a four-part test, to determine restrictions on commercial speech. A. Virginia Consumer Council Test B. Free Speech Matrix C. First Amendment Analysis D. California Test of Affirmation E. Central Hudson Test
E. Central Hudson Test
The _____ is the federal agency that has authority over the labeling, packaging, branding, ingredient listing, and advertising of packaged foods and drug products, as well as cosmetics. A. Federal Food and Drugs Commission B. Federal Commission for Substance Abuse Control C. U.S. Commission for Food, Drugs, and Cosmetics D. Bureau of Alcohol, Tobacco, and Firearms E. Food and Drug Administration
E. Food and Drug Administration
The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) is an agency within the _____ that enforces laws, develops regulations, and is responsible for tax collection for the liquor industry. A. Department of Internal Affairs B. Better Business Bureau C. Department of Commerce D. Food and Drug Administration E. Treasury Department
E. Treasury Department
The ____________________ test considers whether consumers are left with a latent impression that would continue to affect buying decisions and whether corrective ads are needed to remedy the situation. A. SOUP B. Unfair Practices C. STP D. Magnuson-Moss E. Warner-Lambert
E. Warner-Lambert
Which of the following programs is likely to be the most controversial of all the Federal Trade Commission's (FTC's) programs? A. ad substantiation B. implied uniqueness C. puffery legitimization D. advertising deregulation E. corrective advertising
E. corrective advertising
Which of the following media has the most stringent review and approval process for advertising? A. community radio B. business magazines C. newspaper and trade publications D. the Internet E. the four major television networks
E. the four major television networks
A promotion is not considered a lottery if a prize is offered.
FALSE
Network standards regarding acceptable advertising typically remain constant.
FALSE
Puffery is as an illegal, deceptive practice.
FALSE
The Second Amendment protection has been extended to commercial speech.
FALSE
Advertising practices considered unfair include claims that might exploit such vulnerable groups as children and older adults.
TRUE
Federal law requires that advertisers possess substantiation for their advertising claims before the claims are published.
TRUE
In 2016, Facebook imposed a global ban on private gun sales on Facebook and Instagram, which is an example of self-regulation.
TRUE
Legislation is being considered that would either ban or impose major restrictions on direct-to-consumer advertising of drugs.
TRUE
Policies and procedures for industry self-regulation are established by the Advertising Self-Regulatory Council.
TRUE
Self-regulation and control of advertising emanate from individual advertisers and their agencies.
TRUE
Self-regulation begins with the interaction of client and agency when creative ideas are generated and submitted for consideration.
TRUE
Spamming is the sending of unsolicited multiple commercial electronic messages.
TRUE
The Division of Advertising Practices protects consumers from deceptive and unsubstantiated advertising and enforces the provisions of the FTC Act that forbid misrepresentation, unfairness, and deception in general advertising at the national and regional level.
TRUE
The U.S. Postal Service has regulations that affect advertising.
TRUE
The Wheeler-Lea Amendment gave the Federal Trade Commission (FTC) the power to issue cease-and-desist orders and levy fines on violators.
TRUE
