Question 1

Ads must disclose qualifying information underlying their claims.

Accepted Answer

A) True 
 B)False

Question 2

Federal law governs the use of terms such as fresh on food labels.

Accepted Answer

A) True 
 B)False

Question 3

A credit collection agency may contact a debtor at any time.

Accepted Answer

A) True 
 B)False

Question 4

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) C) and D)
F) B) and C)

Question 5

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) All of the above
F) A) and C)

Question 6

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 7

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 8

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 9

Lawncare Company and Mowers,Inc.make yard tools.Both companies use only steel produced in the United States.Lawncare's ad claims,"We use only U.S.steel,while our competitors use inferior foreign steel!" This statement is​

Accepted Answer

A)  an obvious exaggeration.
B)  puffery.
C)  a false claim about a competitor's product.
D)  a half-truth.E) None of the above
F) A) and B)

Question 10

Package labels must use words that the ordinary consumer understands.

Accepted Answer

A) True 
 B)False

Question 11

Marilyn receives an unsolicited credit card in the mail and tosses it on her desk.Without Marilyn's permission,her roommate Nancy uses the card to buy a new laptop for $1,800.Marilyn is​

Accepted Answer

A)  liable for $1,000.
B)  liable for $500.
C)  liable for $50.
D)  not liable for any amount.E) C) and D)
F) A) and B)

Question 12

Pro Motor Company makes cars.Federal law requires Pro to attach a label that includes the Environmental Protection Agency's fuel economy estimate for a vehicle to​

Accepted Answer

A)  every new car.
B)  no car-compliance with the law is voluntary.
C)  select old and new cars.
D)  whichever vehicles the car maker chooses.E) B) and D)
F) None of the above

Question 13

Merchants must issue a refund within a specified period of time when a consumer cancels an order.

Accepted Answer

A) True 
 B)False

Question 14

The Federal Trade Commission was created to prevent unfair and deceptive trade practices.

Accepted Answer

A) True 
 B)False

Question 15

Urban Loan Company extends credit to consumers.Urban is subject to the Equal Credit Opportunity Act,which prohibits credit discrimination based on​

Accepted Answer

A)  credibility.
B)  financial awareness.
C)  occupation.
D)  gender.E) A) and C)
F) B) and C)

Question 16

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 17

Soundbytes Corporation sells phones.Soundbytes's ad states that voice on its phones is "clear as blue sky on a cloudless day." The Federal Trade Commission would consider this claim​

Accepted Answer

A)  false and misleading.
B)  impermissibly vague and general.
C)  a deceptive half-truth.
D)  none of the choices.E) A) and B)
F) All of the above

Question 18

Bea borrows funds from Credit Union to repair her home and to buy a car.She buys a laptop from Discount Store in a transaction financed by the seller.If these parties are subject to the Truth-in-Lending Act,Regulation Z applies to​

Accepted Answer

A)  the car loan only.
B)  the home repair loan only.
C)  the retail installment sale only.
D)  the car loan,the home repair loan,and the retail installment sale.E) A) and D)
F) A) and C)

Question 19

Home Products,Inc. ,in its advertisements,makes false claims about its own products and about the products of its competitors. The firm may be subject to sanctions for the false claims about​

Accepted Answer

A)  its products only.
B)  its competitors' products only.
C)  its products and its competitors' products.
D)  none of the choices.E) A) and C)
F) B) and D)

Question 20

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) A) and D)
F) C) and D)

Exam 24: Consumer Protection

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

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

Correct AnswerverifiedShow Answer

Marilyn receives an unsolicited credit card in the mail and tosses it on her desk.Without Marilyn's permission,her roommate Nancy uses the card to buy a new laptop for $1,800.Marilyn is​

Correct AnswerverifiedShow Answer

The Federal Trade Commission was created to prevent unfair and deceptive trade practices.

Correct AnswerverifiedShow Answer

Bea borrows funds from Credit Union to repair her home and to buy a car.She buys a laptop from Discount Store in a transaction financed by the seller.If these parties are subject to the Truth-in-Lending Act,Regulation Z applies to​

Correct AnswerverifiedShow Answer

Soundbytes Corporation sells phones.Soundbytes's ad states that voice on its phones is "clear as blue sky on a cloudless day." The Federal Trade Commission would consider this claim​

Correct AnswerverifiedShow Answer

A credit collection agency may contact a debtor at any time.

Correct AnswerverifiedShow Answer

Federal law governs the use of terms such as fresh on food labels.

Correct AnswerverifiedShow Answer

Home Products,Inc. ,in its advertisements,makes false claims about its own products and about the products of its competitors. The firm may be subject to sanctions for the false claims about​

Correct AnswerverifiedShow Answer

Package labels must use words that the ordinary consumer understands.

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

Merchants must issue a refund within a specified period of time when a consumer cancels an order.

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

Ads must disclose qualifying information underlying their claims.

Correct AnswerverifiedShow Answer

Pro Motor Company makes cars.Federal law requires Pro to attach a label that includes the Environmental Protection Agency's fuel economy estimate for a vehicle to​

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

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

Urban Loan Company extends credit to consumers.Urban is subject to the Equal Credit Opportunity Act,which prohibits credit discrimination based on​

Correct AnswerverifiedShow Answer

Lawncare Company and Mowers,Inc.make yard tools.Both companies use only steel produced in the United States.Lawncare's ad claims,"We use only U.S.steel,while our competitors use inferior foreign steel!" This statement is​

Correct AnswerverifiedShow Answer

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

Correct Answer
verified

Marilyn receives an unsolicited credit card in the mail and tosses it on her desk.Without Marilyn's permission,her roommate Nancy uses the card to buy a new laptop for $1,800.Marilyn is

Correct Answer
verified

Correct Answer
verified

Bea borrows funds from Credit Union to repair her home and to buy a car.She buys a laptop from Discount Store in a transaction financed by the seller.If these parties are subject to the Truth-in-Lending Act,Regulation Z applies to

Correct Answer
verified

Soundbytes Corporation sells phones.Soundbytes's ad states that voice on its phones is "clear as blue sky on a cloudless day." The Federal Trade Commission would consider this claim

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Home Products,Inc. ,in its advertisements,makes false claims about its own products and about the products of its competitors. The firm may be subject to sanctions for the false claims about

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Pro Motor Company makes cars.Federal law requires Pro to attach a label that includes the Environmental Protection Agency's fuel economy estimate for a vehicle to

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

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

Urban Loan Company extends credit to consumers.Urban is subject to the Equal Credit Opportunity Act,which prohibits credit discrimination based on

Correct Answer
verified

Lawncare Company and Mowers,Inc.make yard tools.Both companies use only steel produced in the United States.Lawncare's ad claims,"We use only U.S.steel,while our competitors use inferior foreign steel!" This statement is

Correct Answer
verified