Question 1

Which of the following factors does the Federal Trade Commission (FTC)  consider in evaluating an ad for deception?

Accepted Answer

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 ruleF) B) and C)
G) B) and E)

Question 2

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.F) A) and B)
G) A) and C)

Question 3

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.

Accepted Answer

A)  Federal Trade Commission
B)  American Bar Association
C)  U.S.Supreme Court
D)  Better Business Bureau
E)  American Marketing AssociationF) B) and C)
G) B) and E)

Question 4

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 disclosureF) B) and D)
G) C) and D)

Question 5

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.

Accepted Answer

A)  unfairness
B)  deception
C)  puffery
D)  affirmative disclosure
E)  cease-and-desist orders According to Federal Trade Commission policy, the basis for determining unfairness is that a trade practice (1)  causes substantial physical or economic injury to consumers, (2)  could not reasonably be avoided by consumers, and (3)  must not be outweighed by countervailing benefits to consumers or competition.F) A) and E)
G) None of the above

Question 6

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.

Accepted Answer

A)  SOUP
B)  Unfair Practices
C)  STP
D)  Magnuson-Moss
E)  Warner-LambertF) A) and E)
G) A) and C)

Question 7

The courts have extended First Amendment protection to

Accepted Answer

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. The courts have extended First Amendment protection to commercial speech, which is speech that promotes a commercial transaction.F) All of the above
G) A) and C)

Question 8

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.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following statements is TRUE of self-regulation of advertising?

Accepted Answer

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.F) B) and E)
G) A) and C)

Question 10

Which of the following statements about self-regulation by media is TRUE?

Accepted Answer

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.F) A) and D)
G) A) and C)

Question 11

Marketers' use of trade allowances is controlled by the _____, which prohibits price discrimination.

Accepted Answer

A)  Federal Trade Commission Act
B)  Lanham Act
C)  Robinson-Patman Act
D)  FDA Act
E)  Wheeler-Lea AmendmentF) None of the above
G) A) and B)

Question 12

Policies and procedures for self-regulation of the advertising industry are established by the

Accepted Answer

A)  National Association of Broadcasters.
B)  Vision Council of America.
C)  National Advertising Review Council.
D)  Independent Business Alliance.
E)  Association of American Publishers.F) B) and E)
G) A) and B)

Question 13

_____, as defined by the First Amendment to the U.S.Constitution, is the most basic federal law governing advertising in the United States.

Accepted Answer

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 pressF) C) and D)
G) C) and E)

Question 14

Which of the following media has the most stringent review and approval process for advertising?

Accepted Answer

A)  community radio
B)  business magazines
C)  newspaper and trade publications
D)  the Internet
E)  the four major television networksF) B) and E)
G) A) and B)

Question 15

The __________determined that POM Wonderful LLC had made unsubstantiated claims about the health benefits of its pomegranate juice.

Accepted Answer

A)  FTC
B)  FCC
C)  FDA
D)  ATF
E)  BBBF) C) and D)
G) B) and E)

Question 16

Which of the following statements is TRUE of the Electronic Retailing Self-Regulation Program (ERSP) ?

Accepted Answer

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 (ER
A)   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 (FT
C)   to work toward the self-regulation of electronic retailing.F) B) and E)
G) C) and D)

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

The Wheeler-Lea Act withdrew the Federal Trade Commission's (FTC's) power to regulate advertising.

Accepted Answer

A) True 
 B)False

Question 19

The _______________ was established as part of the 1998 tobacco settlement and is dedicated to reducing tobacco use.

Accepted Answer

A)  Direct Marketing Reform Agency
B)  Telephone Consumer Protection Agency.
C)  Direct Selling Association.
D)  American Legacy Foundation.
E)  Federal Telemarketing Reform AgencyF) A) and C)
G) B) and C)

Question 20

The Federal Trade Commission's (FTC's)  advertising substantiation program has had a major effect on the advertising industry because

Accepted Answer

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.F) A) and D)
G) B) and C)

Exam 20: Regulation of Advertising and Promotion

The Wheeler-Lea Act withdrew the Federal Trade Commission's (FTC's) power to regulate advertising.

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

The _______________ was established as part of the 1998 tobacco settlement and is dedicated to reducing tobacco use.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following statements is TRUE of the Electronic Retailing Self-Regulation Program (ERSP) ?

Correct AnswerverifiedShow Answer

Marketers' use of trade allowances is controlled by the _____, which prohibits price discrimination.

Correct AnswerverifiedShow Answer

The courts have extended First Amendment protection to

Correct AnswerverifiedShow Answer

Which of the following statements is TRUE of self-regulation of advertising?

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

Policies and procedures for self-regulation of the advertising industry are established by the

Correct AnswerverifiedShow Answer

Which of the following factors does the Federal Trade Commission (FTC) consider in evaluating an ad for deception?

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

Which of the following statements about self-regulation by media is TRUE?

Correct AnswerverifiedShow Answer

Which of the following media has the most stringent review and approval process for advertising?

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

The __________determined that POM Wonderful LLC had made unsubstantiated claims about the health benefits of its pomegranate juice.

Correct AnswerverifiedShow Answer

_____, as defined by the First Amendment to the U.S.Constitution, is the most basic federal law governing advertising in the United States.

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

The Federal Trade Commission's (FTC's) advertising substantiation program has had a major effect on the advertising industry because

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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