TBCh18F - CHAPTER 18 Consumer Protection TRUE-FALSE...

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C H A P T E R 1 8 Consumer Protection T RUE -F ALSE Q UESTIONS 1. In general, consumer protection law at the state level is more stringent than federal law. ANSWER: True SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 2. Executive branch regulatory agencies are located in cabinet departments. ANSWER: True SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 3. The Food and Drug Administration has the authority to require that certain drugs be available only by prescription. ANSWER: True SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 4. The U.S. Supreme Court has ruled that compounded drugs are illegal. ANSWER: False SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 5. The labeling of medical devices is under the jurisdiction of the Food and Drug Administration. ANSWER: True SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 6. In some cases, even if a manufacturer provides warnings as mandated by the Food and Drug Administration, it may still be fund liable under state product liability law for failure to warn if reasonable manufacturers would have done more. ANSWER: True SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 7. The Wool Products Labeling Act is an example of a federal law regulating the labeling of clothing. ANSWER: True SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 251
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252 MANAGERS AND THE LEGAL ENVIRONMENT 8. The Federal Commerce Commission has adopted guidelines specifying when manufacturers and marketers can label their products “Made in USA.” ANSWER: False SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 9. Courts usually consider advertisements to be only an offer to deal. ANSWER: True SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 10. Congress has made it a federal crime to engage in the extortionate extension of credit. ANSWER: True SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 11. If a used car is sold without a warranty, the label must state that the car is being sold “as is.” ANSWER: True SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 12. State may regulate odometer tampering, but there is no federal law that does so. ANSWER: False SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 13. The Truth-in-Lending Act (TILA) is intended to assure a truthful loan application by the consumer. ANSWER: False SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 14. The Fair Credit Reporting Act does not give consumers a right to have corrected copies of their credit reports sent to creditors. ANSWER: False SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 15. The Fair Credit Reporting Act protects the consumer by limiting the amount of interest charged on credit card accounts. ANSWER: False SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 16. The Fair Debt Collection Practices Act applies only to third-party debt collectors.
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CHAPTER 18 CONSUMER PROTECTION 253 ANSWER: True SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 17. Unsolicited merchandise sent by U.S. mail may be kept by the recipient without incurring any
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This note was uploaded on 10/18/2011 for the course BUSS 240 taught by Professor Na during the Fall '10 term at Strayer.

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TBCh18F - CHAPTER 18 Consumer Protection TRUE-FALSE...

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