GM520 - Week 6 Discussion Questions

GM520 - Week 6 Discussion Questions - Question #1: Please...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Question #1: Please read Problem 11 about credit cards and the kinds of debt being incurred by consumers these days, and answer the following questions: Are banks acting in a responsible fashion with their solicitations of consumers for credit cards and increases in credit card lines? I believe that the banks are not acting in a responsible fashion with their solicitation of consumers for credit cards and credit card lines. As mentioned in the article, the banks are advertising “promotions of credit card and debt to increase limits” in an attempt to gather additional consumers. I think by advertising these credit cards to college and high school students, and then providing them with higher credit limits and promotions, the banks are aiming to increase the number of irresponsible spenders in today’s society to make money. What responsibility do consumers have with regard to credit card debt? Consumers are held completely liable for credit card debt they have incurred. The consumer had the choice to use or not use the card and should be held responsible for the actual use. What disclosure rules apply in banks’ solicitations of credit card customers? In banks’ solicitation of credit card customers, the disclosures required sent out to the customer must have the following information: (i) what interest charge and APR for the charges on the credit card, (ii) when the bills will be sent, (iii) what to do about questions on the bills, and (iv) when payments are due. In addition to the aforementioned, the bank’s solicitation must provide a disclosure of all terms if any part of the credit agreement is mentioned in an advertisement. What should the banks do to influence legislation? To influence legislation Banks have spent lots of money lobbing Congress for rules more favorable to them. Per the Administrative Procedures Act, Banks can also provide their side and opinion with public comments during the rule making process to influence legislation. Question #2: Look at Problem 16-8 found on page 561 of your eBook. We will begin our discussion this week by working through this "bread" problem to help us understand "per se" violations and how they affect how anti-trust suits are brought and proven. To get started, let’s answer the following questions about Problem 8: Was Continental’s conduct illegal under the Sherman Act? Why or why not? Continental’s conduct was illegal under the Sherman Act because of the act of price fixing. Price fixing is the violation of “raising, depressing, fixing, pegging, or stabilizing the price of a commodity” and a violation of Section 1 of the Sherman Act (p. 539) Inglis’ accusations of price fixing bring to light Continental selling its private label bread at below-cost prices. Inevitably, with such low sale prices for Continental’s private label, consumers would be attracted to the low
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
price, and the retailers would want to stock more of goods that sold so well. As stated in the passage, Continental earned “more grocery –shelf space for its advertised label Wonder” as a
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 10/13/2011 for the course MAFM FI516 taught by Professor Anthonycriniti during the Spring '10 term at Keller Graduate School of Management.

Page1 / 6

GM520 - Week 6 Discussion Questions - Question #1: Please...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online