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Exam 21: Consumer Protection

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Question 31

True/False

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Credit cannot be denied solely on whether a person receives certain forms of income, such as public-assistance.

A) True
B) False

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Question 32

True/False

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The government cannot remove a product from the market simply because it is considered imminently hazardous.

A) True
B) False

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Question 33

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Mouth-Waterin' Treats Company wants to sell its candy in a normal-sized package labeled "Gigantic Size." NuFabrics, Inc., wants to advertise its sweaters as having "That Wool Feel" but does not want to specify on labels that the sweaters are 100 percent polyester. Can these firms market their products as they would like? If not, why not?

The federal agency that oversees the practices of banks, mortgage lenders, and credit-card companies is

Federal and state laws are aimed at protecting consumers from

A toothpaste ad that states, "Nine out of ten dentists support our product," would not be deceptive if the company asked ten dentists.

A creditor can always require the signature of a cosigner on a credit application.

The Federal Trade Commission actively monitors online advertising.

The Fair Debt Collection Practices Act allows debt collectors to do thorough investigations, including interviewing parents, spouses, co-workers, employers, and landlords about a consumer who owes a debt.

Marketmaster Inc. includes in its advertising accurate pictures of the product, statements about the product that are technically true but leave out some important information, vague generalities, and puffery about its products. The firm may be subject to sanctions for

Brew Coffee Company sells coffee and related beverages. The company's ad contends that ambitious businesspersons "Drink Us & Rise Up in the World!' " The Federal Trade Commission would consider this ad to be

Consumer protection law is exclusively governed by the federal government.

Deceptive advertising occurs if a reasonable consumer would be misled by an advertising claim.

Half-truths-information that is true but incomplete-are not deceptive because such statements are at least half true.

Spicy Salsa, Inc., complains to the Federal Trade Commission (FTC) about an ad broadcast by Tangy Taco Sauce Company, Spicy's competitor. The FTC investigates and concludes that the ad is deceptive. The FTC's next step is to

Federal law does not require food product labels to identify the product .

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

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

Generally, online ads-unlike other ads-can be less than truthful and not every claim must be substantiated

Bait-and-switch advertising occurs if the seller fails to have reasonably adequate quantities of the advertised item available.