Question 1

The Federal Trade Commission (FTC) Improvements Act empowered the FTC to establish industrywide rules that define unfair practices before they occur.

Accepted Answer

A) True 
 B)False

Question 2

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:

Accepted Answer

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.

Question 3

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.

Accepted Answer

A)  Federal Trade Commission
B)  Federal Communications Commission
C)  Fairness Doctrine
D)  U.S.Postal Service
E)  National Association of Broadcasters

Question 4

A promotion such as a contest or sweepstakes can avoid being considered a lottery by:

Accepted Answer

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.

Question 5

Advertising practices considered unfair include claims that might exploit such vulnerable groups as children and older adults.

Accepted Answer

A) True 
 B)False

Question 6

The _____ regulates and controls the advertising of alcoholic beverages.

Accepted Answer

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

Question 7

_____ 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."

Accepted Answer

A)  Deceptive advertising
B)  Unfairness
C)  Comparative advertising
D)  Puffery
E)  Affirmative disclosure

Question 8

The _____ gave the Federal Trade Commission (FTC)  the power to establish trade regulation rules.

Accepted Answer

A)  Magnuson-Moss Act
B)  FTC Act
C)  Wheeler-Lea Amendment
D)  Sherman Antitrust Act
E)  Trade Regulation Act

Question 9

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.

Accepted Answer

A)  puffery
B)  affirmative disclosure
C)  selective retention
D)  deception
E)  selective disclosure

Question 10

A promotion is not considered a lottery if a prize is offered.

Accepted Answer

A) True 
 B)False

Question 11

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.

Accepted Answer

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

Question 12

The U.S. Postal Service has regulations that affect advertising.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following sentences is true of the Better Business Bureau (BBB) ?

Accepted Answer

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.

Question 14

Which of the following programs is likely to be the most controversial of all the Federal Trade Commission's (FTC's)  programs?

Accepted Answer

A)  Ad substantiation
B)  Implied uniqueness
C)  Puffery legitimization
D)  Advertising deregulation
E)  Corrective advertising

Question 15

Regulatory concerns never play a major role in the advertising decision-making process.

Accepted Answer

A) True 
 B)False

Question 16

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.

Accepted Answer

A)  National Advertising Review Board
B)  Federal Trade Commission
C)  Federal Communications Commission
D)  National Association of Broadcasters
E)  Standards and Practices Division

Question 17

Which of the following statements is true of policies and procedures established for industry self-regulation by the Advertising Self-Regulatory Council (ASRC) ?

Accepted Answer

A)  The Children's Advertising Review Unit (CARU)  reviews advertising directed to children between the age of 12 and 16.
B)  The National Advertising Division of the Council of Better Business Bureaus (NA
D)   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 (NA
D)   is staffed primarily by attorneys.
E)  The Electronic Retailing Self-Regulation Program (ERSP)  reviews advertising claims that are local in scopE.Staffed primarily by attorneys, National Advertising Division of the Council of Better Business Bureaus (NA
D)  , Children's Advertising Review Unit (CARU) , and Electronic Retailing Self-Regulation Program (ERSP)  review advertising claims that are national in scope.

Question 18

Federal law requires that advertisers possess substantiation for their advertising claims before the claims are published.

Accepted Answer

A) True 
 B)False

Question 19

The Central Hudson Test is typically a two-part test established by the American Marketing Association.

Accepted Answer

A) True 
 B)False

Question 20

The _____ is a government regulation that is increasingly being used by companies for filing lawsuits against competitors they believe are making false claims.

Accepted Answer

A)  Federal Trade Commission Act
B)  Wheeler-Lea Amendment
C)  Lanham Act
D)  Robinson-Patman Act
E)  Clayton Antitrust Act

Exam 20: Regulation of Advertising and Promotion

A promotion is not considered a lottery if a prize is offered.

Correct AnswerverifiedShow Answer

A promotion such as a contest or sweepstakes can avoid being considered a lottery by:

Correct AnswerverifiedShow Answer

The _____ regulates and controls the advertising of alcoholic beverages.

Correct AnswerverifiedShow Answer

The _____ is a government regulation that is increasingly being used by companies for filing lawsuits against competitors they believe are making false claims.

Correct AnswerverifiedShow Answer

The _____ gave the Federal Trade Commission (FTC) the power to establish trade regulation rules.

Correct AnswerverifiedShow Answer

Which of the following statements is true of policies and procedures established for industry self-regulation by the Advertising Self-Regulatory Council (ASRC) ?

Correct AnswerverifiedShow Answer

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:

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

Advertising practices considered unfair include claims that might exploit such vulnerable groups as children and older adults.

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

Which of the following sentences is true of the Better Business Bureau (BBB) ?

Correct AnswerverifiedShow Answer

The Federal Trade Commission (FTC) Improvements Act empowered the FTC to establish industrywide rules that define unfair practices before they occur.

Correct AnswerverifiedShow Answer

_____ 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."

Correct AnswerverifiedShow Answer

The U.S. Postal Service has regulations that affect advertising.

Correct AnswerverifiedShow Answer

Federal law requires that advertisers possess substantiation for their advertising claims before the claims are published.

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

The Central Hudson Test is typically a two-part test established by the American Marketing Association.

Correct AnswerverifiedShow Answer

Which of the following programs is likely to be the most controversial of all the Federal Trade Commission's (FTC's) programs?

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

Regulatory concerns never play a major role in the advertising decision-making process.

Correct AnswerverifiedShow Answer

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