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Q:
Recently the FTC investigated bloggers who were being sponsored to pitch products. The FTC ruled that the blogger must disclose any type of compensation that is received. This is an example of a:
A) cease and desist order.
B) consent order.
C) corrective advertising order.
D) trade regulation ruling.
Q:
The funeral industry was sanctioned by the FTC in 1984 and 1994 for practices common in the industry that the FTC believed were not fair to consumers. To correct these misleading practices, the FTC issued a:
A) cease and desist order.
B) consent order.
C) corrective advertising order.
D) trade regulation ruling.
Q:
A trade regulatory ruling by the Federal Trade Commission applies to:
A) wholesalers.
B) international companies.
C) an industry.
D) retailers.
Q:
The Federal Trade Commission orders corrective advertising in:
A) only the most severe instances of deceptive and misleading advertising.
B) cases involving advertising to children.
C) cases that are appealed to the U.S. Court of Appeals.
D) most cases that are investigated.
Q:
When a company must pay for ads that refute false claims it made in previous ads, it is called a(n):
A) consent order.
B) administrative ruling.
C) cease and desist order.
D) corrective advertisement.
Q:
Which agency has the authority to order corrective advertising?
A) Federal Communications Commission
B) Federal Trade Commission
C) Food and Drug Administration
D) Bureau of Alcohol, Tobacco, and Firearms
Q:
Occasionally the Federal Trade Commission bypasses its typical process and uses the court system to stop an unfair or deceptive marketing practice. Of the following, which would be the most likely to trigger this type of action?
A) The actions of a company are so severe that immediate action is needed
B) A full commission of the FTC is not available to hear a case
C) A company violates a consent order
D) A company appeals a consent order
Q:
Occasionally the FTC bypasses its typical process and uses the court system to stop an unfair marketing practice. Of the following, which would be the most likely to trigger this type of action?
A) A company violates an FTC cease and desist order
B) A full commission of the FTC is not available to hear a case
C) A company violates a consent order
D) A company appeals a consent order
Q:
Company leaders who are not satisfied with the ruling of the full FTC can appeal to the U.S. Court of Appeals. The danger in appealing is:
A) the company does not have the opportunity to present oral arguments.
B) the cease and desist orders are normally upheld.
C) a company may be ordered to pay civil penalties.
D) the decision is not binding.
Q:
If after an administrative hearing a company is still not satisfied with the ruling of the FTC, the next step would be to:
A) appeal the decision to the Court of Appeals.
B) hold a hearing before the full FTC.
C) appeal the decision to the Supreme Court.
D) hold a hearing before an administrative law judge.
Q:
If at the end of an administrative hearing of an FTC case, the judge feels a violation of the law has taken place, the judge issues a:
A) cease and desist order.
B) consent agreement.
C) corrective advertising directive.
D) trade regulation ruling.
Q:
If a consent agreement cannot be reached with a company, the Federal Trade Commission then issues a(n):
A) cease and desist order.
B) corrective advertising directive.
C) appeal to the Court of Appeals.
D) administrative complaint.
Q:
An administrative complaint is:
A) a formal proceeding before an administrative law judge used by the Federal Trade Commission.
B) a formal hearing before the Court of Appeals.
C) a formal hearing before the full Federal Trade Commission.
D) used by the National Advertising Review Board when the NAD cannot solve a complaint.
Q:
When the FTC makes a judgment against a company for false or misleading advertising, which of the following would come first?
A) Administrative complaint
B) Cease and desist order
C) Consent order
D) Court-ordered reparations
Q:
When the Federal Trade Commission insists that a company stop making a false claim in an advertisement and that company agrees to stop, it is an example of a(n):
A) legal review.
B) cease and desist order.
C) administrative complaint.
D) consent order.
Q:
Explain the difference between deception and puffery.
Q:
In terms of substantiation of advertising claims, the FTC and the courts consider the totality of evidence, not the results of just one study if other studies find different results.
Q:
In terms of substantiation of advertising claims, the FTC and the courts state that evidence presented must be for the exact product being tested, not for a similar product.
Q:
In terms of substantiation of advertising claims, the FTC and the courts assume that consumers can and will read fine print or qualifying language that is placed in an advertisement.
Q:
To substantiate an advertising claim, the statement must reflect the typical experience that a customer would expect to encounter from using a good or service, unless the advertisement clearly and prominently states otherwise.
Q:
If a company uses endorsers, the statements made by the endorsers must be truthful but can represent the experiences of typical people rather than the endorsers.
Q:
Substantiation means that an advertising claim or promise must be proven with data, facts, or through competent and reliable evidence.
Q:
When a statement is made that is deemed to be puffery, the concept of substantiation applies.
Q:
Although the word "better" is normally accepted as puffery, the word "best" is somewhat vague and implies a comparison, which has recently been tested through the FTC.
Q:
Terms normally associated with puffery include "best," "greatest," and "finest."
Q:
The key difference, in terms of the FTC and the courts, between puffery and a claim is that puffery is not considered to be a factual statement while a claim is considered to be a factual statement that can be proven true or false.
Q:
A claim is when a firm makes an exaggerated statement about a good or service, while puffery is when a firm makes a factual statement about a good or service.
Q:
The Wheeler-Lea Amendment makes advertising using puffery illegal.
Q:
To substantiate an advertisement, the Federal Trade Commission and courts tend to use each of the following principles except:
A) the federal government assumes consumers read ads "broadly" and do not notice details hidden in fine print.
B) tests have to be with the actual product or one that is considered similar.
C) evidence should come from individuals or companies that would be considered experts by others in the field.
D) the courts and FTC will consider the totality of evidence concerning a claim, not just one particular study that may support a claim.
Q:
If an advertiser uses expert endorsements, statements made by the expert in the advertisement must be based on:
A) legitimate tests performed by experts in the field.
B) the opinion of "typical persons" who would use the product.
C) truthful statements that represent the expert's personal experience.
D) lab or engineering tests.
Q:
The FTC test of substantiation requires:
A) a comparison of marketing claims made by competing firms.
B) the use of a code of ethics.
C) data, facts, or competent and reliable evidence.
D) testimony from an expert in the field.
Q:
The substantiation test for false and misleading advertising requires:
A) scientific tests.
B) consumer testimonials.
C) competent and reliable evidence.
D) the average person to be convinced it is not false and misleading.
Q:
Of the following taglines or slogans, which would most likely trigger an investigation by the Federal Trade Commission or National Advertising Division of the CBBB?
A) For the finest Asian food come to China Garden
B) Eat at Wendy's, the best hamburgers in town
C) Tree Top apple juice is twice as good
D) For better looking skin, use Avon
Q:
The Federal Trade Commission, National Advertising Division, and the courts would consider the word "better" used in an advertisement to be:
A) deceptive and misleading advertising.
B) puffery.
C) puffery, but it also implies a comparison, which, if challenged, may require substantiation.
D) a violation of the Federal Trade Commission Act.
Q:
If Wendy's makes an advertising claim that the company offers great-tasting hamburgers, the practice is:
A) a violation of the company's code of ethics.
B) misleading and deceptive advertising.
C) puffery.
D) cross-promotion claim.
Q:
Words such as "best," "greatest," and "finest" used in advertising are examples of:
A) deceptive advertising.
B) misleading advertising.
C) standard industry practices.
D) puffery.
Q:
Puffery is:
A) a deliberate attempt to mislead and deceive.
B) any illegal marketing activity.
C) increased product prices to cover advertising costs.
D) an exaggerated claim with no overt attempt to mislead or deceive.
Q:
What criteria must be met to deem an advertisement deceptive or misleading?
Q:
Identify the five major federal government agencies that deal with some aspect of marketing as its primary responsibility.
Q:
A "typical person" must believe the content of an advertisement to be false in order for the Wheeler-Lea Amendment to apply.
Q:
When a substantial number of people are misled by a series of commercials or an advertisement, it is deemed to be deceptive or misleading.
Q:
The Wheeler-Lea Amendment (1938) of the Federal Trade Commission Act prohibits false and misleading advertisements.
Q:
When the FTC Act was passed in 1914, the Federal Trade Commission's responsibility was to enforce antitrust laws and to protect businesses from one another.
Q:
The federal agency that presides over marketing communications is the Federal Communications Commission.
Q:
A person targeted by a mail fraud campaign should contact the Federal Communications Commission.
Q:
The FCC places limits on advertising to children on weekends, but not on weekdays.
Q:
The Federal Communications Commission holds jurisdiction over the content of advertisements transmitted by mass media.
Q:
The Federal Communications Commission) is responsible for monitoring television advertising directed to children, in terms of the number of minutes per hour that are directed to children.
Q:
The Federal Trade Commission monitors advertising on food packages and advertisements for drugs.
Q:
The Food and Drug Administration regulates and oversees the packaging and labeling of products. It also monitors advertising on food packages and advertisements for drugs.
Q:
Reebok and Skechers were both forced to pay fines for misleading advertising about shoe products.
Q:
An advertisement or communication is deemed to be deceptive or misleading when:
A) the misrepresentation induces anyone or someone to make a purchase.
B) a substantial number of people make a purchase or are influenced by the advertisement.
C) a substantial number of people or the "typical person" is left with a false impression or misrepresentation that relates to the product.
D) a competing firm makes the same claim.
Q:
All of the following are components of the Wheeler-Lea Amendment to the FTC Act except:
A) expanded authority of the FTC to prohibit false and misleading advertising practices.
B) granted the FTC power to monitor the amount of time television stations advertise to children.
C) gave the FTC power to levy fines when necessary.
D) granted the FTC access to the courts to enforce the law and ensure compliance with FTC rulings.
Q:
The Wheeler-Lea Amendment to the FTC Act:
A) regulates excessive advertising to children.
B) prohibits deceptive and misleading advertising.
C) prohibits puffery and comparative advertising.
D) sets the substantiation requirements that an ad must meet when claims are made about a product.
Q:
The original role of the FTC was to:
A) provide protection for consumers from big businesses.
B) oversee the marketing industry.
C) enforce antitrust laws and protect businesses from one another.
D) regulate advertising and marketing communications.
Q:
The agency with the greatest degree of jurisdiction over marketing and advertising is the:
A) FTC.
B) FCC.
C) USPS.
D) FDA.
Q:
The Food and Drug Administration regulates and oversees:
A) marketing materials sent through the mail.
B) packaging and labeling of products, advertising on food products, and advertising of drugs.
C) television, radio, and the telephone industries.
D) the amount of time that television stations are permitted to advertise to children.
Q:
The law states that advertising to children cannot exceed 12 minutes per hour during weekdays. Which organization is responsible for making sure this time limit is not exceeded?
A) Federal Communications Commission
B) Federal Trade Commission
C) Food and Drug Administration
D) United States Postal Service
Q:
Public complaints about the amount of violence on television would be sent to the:
A) FCC.
B) FDA.
C) FTC.
D) BATF.
Q:
If a customer is concerned about the labeling on a bag of potato chips, the regulatory agency to contact is the:
A) Federal Communications Commission.
B) Food and Drug Administration.
C) Federal Trade Commission.
D) United States Postal Service.
Q:
The agency that monitors advertising on food packages and advertisements for medicines is the:
A) Federal Trade Commission.
B) Federal Communications Commission.
C) United States Postal Service.
D) Food and Drug Administration.
Q:
The agency that would be concerned with the salt content in foods would be the:
A) Federal Trade Commission.
B) Federal Communications Commission.
C) United States Postal Service.
D) Food and Drug Administration.
Q:
Civil law is based on local customs, traditions, and precedents.
Q:
Entitlings and enhancements are reactive damage control public relations activities.
Q:
Proactive damage control strategies include entitlings, enhancements, and crisis management.
Q:
A strong company image that takes years to build may be destroyed in just a few weeks or months if something bad happens.
Q:
Damage control is only used when consumers make unjustified complaints against a company.
Q:
Damage control involves reacting to negative events caused by a company error, grievances filed by consumers, or exaggerated negative news stories.
Q:
When tires on new Ford vehicles were blowing out prematurely, Ford CEO Jacques Nasser blamed Bridgestone/Firestone for the problem. Bridgestone, in turn, blamed drivers for the problem stating the tires were not inflated sufficiently. Bridgestone/Firestone used which method?
A) Expression of innocence
B) Excuses
C) Apology
D) Justifications
Q:
When tires on new Ford vehicles were blowing out prematurely, Ford CEO Jacques Nasser blamed Bridgestone/Firestone for the problem. He stated it was not Ford's fault. Nasser used which method?
A) Expression of innocence
B) Excuses
C) Apology
D) Justifications
Q:
Each of the following is an impression management technique except:
A) expression of innocence.
B) excuses.
C) justification.
D) entitlings.
Q:
In terms of using an impression management technique to respond to negative publicity, a company that makes the negative incident appear minor or trivial is using the remedial approach of:
A) expressions of innocence.
B) excuses.
C) justification.
D) apology.
Q:
The public relations department issues the following statement: "Unusual and unforeseen weather caused this accident. It was beyond our control." The statement is a form of:
A) expression of innocence.
B) excuse.
C) rationalization.
D) justification.
Q:
Saying, "We could not have prevented this negative event from happening" is an example of using the impression management technique of:
A) an expression of innocence.
B) an excuse.
C) moral ambiguity.
D) a justification.
Q:
When the public relations department issues a statement saying, "Our competitors deliberately made misstatements about the way to use our product, and people were injured as a result" it is an example of:
A) expression of innocence.
B) excuse.
C) rationalization.
D) justification.
Q:
Saying, "We didn't cause this negative event to happen, it was some other company" is an example of using the impression management technique of:
A) an expression of innocence.
B) an excuse.
C) moral ambiguity.
D) a justification.
Q:
The conscious or unconscious attempt to control images in social situations is:
A) crisis management.
B) enhancement.
C) social responsibility.
D) impression management.
Q:
Apology strategies are most often used in situations in which:
A) the violation was a major situation affecting a large number of people.
B) the violation was minor or the company cannot escape being found guilty.
C) an individual within the company has acted inappropriately, but the company itself has not.
D) legal charges have been filed against the company or someone in the company.
Q:
An apology strategy to manage a negative publicity situation should include each of the following elements except:
A) names of individuals who were responsible for wrong behavior.
B) rejection of the inappropriate behavior.
C) approval of the appropriate behavior.
D) offer of compensation or penance to correct the wrong.
Q:
An apology strategy to manage a negative publicity situation should include each of the following elements except:
A) an expression of guilt.
B) a statement recognizing the inappropriate behavior.
C) acceptance of sanctions because of wrong behavior.
D) a statement about behaviors of the competition.