Question 1

Through careless manufacturing practices, Plastics Company makes and sells products that are unsafe to consumers. This may be subject to sanctions under​

Accepted Answer

A)   ​federal and state law.
B)   ​federal law only.
C)   ​no law, according to the principles of freedom to contract.
D)   ​state law only.E) A) and C)
F) B) and D)

Question 2

Greg signs an installment contract with Home Appliance Store to finance the purchase of new kitchen appliances. This transaction is subject to​

Accepted Answer

A)   ​no federal law.
B)   ​the Fair Credit Reporting Act.
C)   ​the Telecommunications Act.
D)   ​the Truth-in-Lending Act.E) C) and D)
F) B) and D)

Question 3

A sanction known as bait-and-switch advertising requires a company to advertise the products of its competitor to counter its own false claims.​

Accepted Answer

A) True 
 B)False

Question 4

Manufacturers are required to report on any products intended for sale if the products have proved to be hazardous.​

Accepted Answer

A) True 
 B)False

Question 5

The Truth-in-Lending Act applies to persons who, in the ordinary course of their business, lend money, sell on credit, or arrange for the extension of credit.​

Accepted Answer

A) True 
 B)False

Question 6

QT Collection Agency calls Rob several times a day, and sometimes in the middle of the night, about an overdue bill that Standard Credit Company turned over to QT for collection. This is a violation of​

Accepted Answer

A)   ​no federal law.
B)   ​the Fair and Accurate Credit Transactions Act.
C)   ​the Fair Debt Collection Practices Act.
D)   ​the Truth-in-Lending Act.E) All of the above
F) None of the above

Question 7

Consumer Finance Corporation (CFC)  extends credit to consumers. CFC is subject to the Equal Credit Opportunity Act, which prohibits credit discrimination based on​

Accepted Answer

A)   ​intelligence.
B)   ​education.
C)   ​income.
D)   ​race.E) A) and B)
F) B) and D)

Question 8

Cleaners & Solvents, Inc. (CSI) , falsely claims in its ads that its products kill germs "forever." In an action against CSI, the firm is ordered to stop its false advertising. This is​

Accepted Answer

A)   ​a counteradvertising order.
B)   ​a multiple product order.
C)   ​a "cooling-off" law.
D)   ​a validation notice.E) A) and C)
F) A) and B)

Question 9

Cutting Edge Inc. makes and sells tools. One of the tools is believed to be hazardous. The firm may be required to​

Accepted Answer

A)   ​export the tool and sell it only abroad.
B)   ​increase the price to cover the cost of any injuries or damage.
C)   ​reduce the price to indicate the hazard to consumers.
D)   ​remove the tool from the market.E) C) and D)
F) A) and C)

Question 10

Counteradvertising occurs when a salesperson lures a consumer into a store by advertising a low-priced item in order to switch the consumer to a more expensive item.​

Accepted Answer

A) True 
 B)False

Question 11

A credit-card company may increase the interest rate on a customer's credit-card balance at any time.​

Accepted Answer

A) True 
 B)False

Question 12

In a transaction subject to the Truth-in-Lending Act, the terms of a credit instrument must be fully disclosed.​

Accepted Answer

A) True 
 B)False

Question 13

To generate sales, Golden Investments, Inc., uses phone solicitation. Under federal law, in soliciting business, Golden's telemarketers must disclose​

Accepted Answer

A)   ​all material facts related to a sale.
B)   ​only the seller's name.
C)   ​only facts directly related to a potential customer's request.
D)   ​only facts needed to make a sale.E) All of the above
F) None of the above

Question 14

Consumers who are charged more for credit or insurance than others ordinarily would be because of their credit reports must be notified of that fact.​

Accepted Answer

A) True 
 B)False

Question 15

Teri borrows $10,000 from USA Bank to remodel a room in her home. This transaction is subject to​

Accepted Answer

A)   ​no federal law.
B)   ​the Consumer Leasing Act.
C)   ​the Consumer Product Safety Act.
D)   ​the Truth-in-Lending Act.E) A) and C)
F) B) and C)

Question 16

Corner Market sells groceries. Deli & Drug Store sells groceries and fills prescriptions. The party with the chief responsibility to prevent unsafe food and drugs from being sold is​

Accepted Answer

A)   ​Corner Market and Deli & Drug.
B)   ​Deli & Drug only.
C)   ​the Federal Trade Commission.
D)   ​the Food and Drug Administration.E) B) and C)
F) A) and D)

Question 17

A credit-cardholder is liable for all unauthorized charges made before the creditor is notified that the card has been lost.​

Accepted Answer

A) True 
 B)False

Question 18

Package labels must use words that the ordinary consumer understands.​

Accepted Answer

A) True 
 B)False

Question 19

The Federal Reserve Board of Governors has issued a regulation that governs credit provisions associated with sales contracts-Regulation Z.​

Accepted Answer

A) True 
 B)False

Question 20

Under federal law, the calorie content of the food on a menu must be posted by Great Harvest, LLC, if the firm is​

Accepted Answer

A)   ​a restaurant chain with twenty or more locations.
B)   ​a food distributor with twenty or more customers.
C)   ​a food maker with twenty or more products.
D)   ​a food producer with twenty or more acres.E) A) and B)
F) None of the above

Exam 44: Consumer Law

Consumers who are charged more for credit or insurance than others ordinarily would be because of their credit reports must be notified of that fact.​

Correct AnswerverifiedShow Answer

Cleaners & Solvents, Inc. (CSI) , falsely claims in its ads that its products kill germs "forever." In an action against CSI, the firm is ordered to stop its false advertising. This is​

Correct AnswerverifiedShow Answer

To generate sales, Golden Investments, Inc., uses phone solicitation. Under federal law, in soliciting business, Golden's telemarketers must disclose​

Correct AnswerverifiedShow Answer

A credit-cardholder is liable for all unauthorized charges made before the creditor is notified that the card has been lost.​

Correct AnswerverifiedShow Answer

In a transaction subject to the Truth-in-Lending Act, the terms of a credit instrument must be fully disclosed.​

Correct AnswerverifiedShow Answer

Cutting Edge Inc. makes and sells tools. One of the tools is believed to be hazardous. The firm may be required to​

Correct AnswerverifiedShow Answer

The Federal Reserve Board of Governors has issued a regulation that governs credit provisions associated with sales contracts-Regulation Z.​

Correct AnswerverifiedShow Answer

The Truth-in-Lending Act applies to persons who, in the ordinary course of their business, lend money, sell on credit, or arrange for the extension of credit.​

Correct AnswerverifiedShow Answer

Greg signs an installment contract with Home Appliance Store to finance the purchase of new kitchen appliances. This transaction is subject to​

Correct AnswerverifiedShow Answer

Counteradvertising occurs when a salesperson lures a consumer into a store by advertising a low-priced item in order to switch the consumer to a more expensive item.​

Correct AnswerverifiedShow Answer

QT Collection Agency calls Rob several times a day, and sometimes in the middle of the night, about an overdue bill that Standard Credit Company turned over to QT for collection. This is a violation of​

Correct AnswerverifiedShow Answer

Corner Market sells groceries. Deli & Drug Store sells groceries and fills prescriptions. The party with the chief responsibility to prevent unsafe food and drugs from being sold is​

Correct AnswerverifiedShow Answer

Through careless manufacturing practices, Plastics Company makes and sells products that are unsafe to consumers. This may be subject to sanctions under​

Correct AnswerverifiedShow Answer

Under federal law, the calorie content of the food on a menu must be posted by Great Harvest, LLC, if the firm is​

Correct AnswerverifiedShow Answer

Teri borrows $10,000 from USA Bank to remodel a room in her home. This transaction is subject to​

Correct AnswerverifiedShow Answer

Manufacturers are required to report on any products intended for sale if the products have proved to be hazardous.​

Correct AnswerverifiedShow Answer

A sanction known as bait-and-switch advertising requires a company to advertise the products of its competitor to counter its own false claims.​

Correct AnswerverifiedShow Answer

A credit-card company may increase the interest rate on a customer's credit-card balance at any time.​

Correct AnswerverifiedShow Answer

Consumer Finance Corporation (CFC) extends credit to consumers. CFC is subject to the Equal Credit Opportunity Act, which prohibits credit discrimination based on​

Correct AnswerverifiedShow Answer

Package labels must use words that the ordinary consumer understands.​

Correct AnswerverifiedShow Answer

Consumers who are charged more for credit or insurance than others ordinarily would be because of their credit reports must be notified of that fact.

Correct Answer
verified

Cleaners & Solvents, Inc. (CSI) , falsely claims in its ads that its products kill germs "forever." In an action against CSI, the firm is ordered to stop its false advertising. This is

Correct Answer
verified

To generate sales, Golden Investments, Inc., uses phone solicitation. Under federal law, in soliciting business, Golden's telemarketers must disclose

Correct Answer
verified

A credit-cardholder is liable for all unauthorized charges made before the creditor is notified that the card has been lost.

Correct Answer
verified

In a transaction subject to the Truth-in-Lending Act, the terms of a credit instrument must be fully disclosed.

Correct Answer
verified

Cutting Edge Inc. makes and sells tools. One of the tools is believed to be hazardous. The firm may be required to

Correct Answer
verified

The Federal Reserve Board of Governors has issued a regulation that governs credit provisions associated with sales contracts-Regulation Z.

Correct Answer
verified

The Truth-in-Lending Act applies to persons who, in the ordinary course of their business, lend money, sell on credit, or arrange for the extension of credit.

Correct Answer
verified

Greg signs an installment contract with Home Appliance Store to finance the purchase of new kitchen appliances. This transaction is subject to

Correct Answer
verified

Counteradvertising occurs when a salesperson lures a consumer into a store by advertising a low-priced item in order to switch the consumer to a more expensive item.

Correct Answer
verified

QT Collection Agency calls Rob several times a day, and sometimes in the middle of the night, about an overdue bill that Standard Credit Company turned over to QT for collection. This is a violation of

Correct Answer
verified

Corner Market sells groceries. Deli & Drug Store sells groceries and fills prescriptions. The party with the chief responsibility to prevent unsafe food and drugs from being sold is

Correct Answer
verified

Through careless manufacturing practices, Plastics Company makes and sells products that are unsafe to consumers. This may be subject to sanctions under

Correct Answer
verified

Under federal law, the calorie content of the food on a menu must be posted by Great Harvest, LLC, if the firm is

Correct Answer
verified

Teri borrows $10,000 from USA Bank to remodel a room in her home. This transaction is subject to

Correct Answer
verified

Manufacturers are required to report on any products intended for sale if the products have proved to be hazardous.

Correct Answer
verified

A sanction known as bait-and-switch advertising requires a company to advertise the products of its competitor to counter its own false claims.

Correct Answer
verified

A credit-card company may increase the interest rate on a customer's credit-card balance at any time.

Correct Answer
verified

Consumer Finance Corporation (CFC) extends credit to consumers. CFC is subject to the Equal Credit Opportunity Act, which prohibits credit discrimination based on

Correct Answer
verified

Package labels must use words that the ordinary consumer understands.

Correct Answer
verified