Question 1

The Federal Trade Commission (FTC)orders General Sales Company to reveal certain information. The firm complains to a court, arguing that the order is an abuse of the FTC's discretion. Like other agencies, the FTC can use a subpoena to

Accepted Answer

The FTC can use a subpoena to reveal regulatory violations.

Question 2

The Securities and Exchange Commission decides to create a new rule relating to the dissemination of material nonpublic information through social media. The first step is

Accepted Answer

The first step in the rulemaking process is to publish a notice of the proposed rulemaking, which informs the public of the new rule and invites comments.

Question 3

The Securities and Exchange Commission (SEC)wants to review certain documents of Trade Funds Inc. Whether it is permissible for the SEC to request or review the documents depends on whether the documents are

Accepted Answer

The SEC's authority to request or review documents from a company like Trade Funds Inc. is based on the relevance of those documents to an investigation or regulatory compliance check. Documents that are relevant to the SEC's regulatory or oversight functions are subject to review.

Question 4

The Environmental Protection Agency (EPA)wants Waste Disposal Company to produce certain records for review. The EPA can gain access to the records through

Accepted Answer

A subpoena is a legal document that orders an individual or organization to provide documents, records, or appear in court. The EPA can use a subpoena to compel the Waste Disposal Company to produce the necessary records for review.

Question 5

Data Inc. pays income and other taxes collected by the Internal Revenue Service (IRS). Like other federal administrative agencies, the IRS was created by

Accepted Answer

The IRS, like other federal administrative agencies, was created by Congress through enabling legislation. This process allows Congress to establish federal agencies to perform specific tasks, including the collection of taxes and enforcement of tax laws.

Question 6

The executive branch of the government can exercise control over an administrative agency through

Accepted Answer

The president, as part of the executive branch, can influence administrative agencies through veto powers, which can be used to reject legislation affecting the agency's operations or authority.

Question 7

Delta Water Company is subject to a decision by the Environmental Protection Agency. Delta appeals the decision, arguing that it is arbitrary and capricious. This could mean that the decision

Accepted Answer

The term "arbitrary and capricious" is often used in legal contexts to describe a decision that is made without consideration for the facts, lacks a rational basis, or deviates from established policy without justification. Therefore, if Delta Water Company argues that a decision is arbitrary and capricious, it could mean that the agency changed its prior policy without providing adequate justification for doing so.

Question 8

The rules of administrative agencies can be

Accepted Answer

Administrative agencies' rules can have the force of law, meaning they are as binding as laws passed by Congress when they are properly promulgated under authority given by Congress.

Question 9

Retail Stores Inc. pays taxes collected by the appropriate state agencies. Like other state administrative agencies, these agencies were created by

Accepted Answer

State administrative agencies are typically created by a state legislature through an enabling act, which defines the scope and powers of the agency.

Question 10

The Federal Trade Commission Act granted the Federal Trade Commission the power to

Accepted Answer

The Federal Trade Commission Act granted the Federal Trade Commission the power to prevent businesses from engaging in unfair trade practices.

Question 11

The Food and Drug Administration (FDA)is investigating reports that Caplets Corporation is putting potentially harmful additives in Doze, a new pain-relief medication. The FDA's demands for particular documents from Caplets

Accepted Answer

The FDA's demands for documents must be specific and adequately describe the material being sought to ensure they receive the necessary information for their investigation while respecting legal boundaries and the rights of the parties involved.

Question 12

Bath & Kitchen Inc. is subject to a decision by the Consumer Product Safety Commission. Opposed to the decision, the firm wants a court to review it. First, however, the firm must

Accepted Answer

Firms must exhaust all possible administrative remedies before seeking judicial review of an agency's decision. This means they must follow through with all the procedural steps and appeals available within the agency itself before turning to the courts.

Question 13

After a final rule is issued, an administrative agency conducts investigations to monitor

Accepted Answer

Administrative agencies conduct investigations after issuing a final rule primarily to monitor compliance with the rule, ensuring that the entities subject to the rule are following its requirements.

Question 14

Notice-and-comment rulemaking involves a period during which

Accepted Answer

Notice-and-comment rulemaking is a process that allows the public to provide input on proposed rules before they are finalized. This ensures transparency and public participation in the regulatory process.

Question 15

Tia is a witness in a controversy involving the U.S. Bureau of Tobacco and Firearms. Tia can be compelled to appear before an administrative law judge if she is served with

Accepted Answer

A subpoena is a legal document that can compel a person to appear before a court or in this case, an administrative law judge, to provide testimony. The other options do not serve this specific purpose.

Question 16

The Food and Drug Administration (FDA)wants Pharma Inc. to produce certain records for review. Pharma need not reveal

Accepted Answer

Trade secrets are protected from disclosure to prevent harm to a company's competitive position.

Question 17

To notify the public of a proposed rule, the Federal Emergency Management Agency, like other federal agencies, publishes the proposal

Accepted Answer

The Federal Emergency Management Agency, like other federal agencies, publishes proposed rules in the Federal Register to notify the public. This is a formal process required by law to ensure transparency and public participation in the rulemaking process.

Question 18

Persons who favor the creation of a federal agency to regulate the production of genetically modified agricultural products should concentrate their lobbying efforts on

Accepted Answer

Congress is responsible for creating federal agencies and passing legislation, so lobbying efforts should be directed towards Congress to establish a new regulatory body.

Question 19

A final rule issued through a notice-and-comment rulemaking procedure has binding legal effect

Accepted Answer

A final rule issued through a notice-and-comment rulemaking procedure has binding legal effect unless a court overturns it. Courts can review and potentially invalidate agency rules, but until such a decision is made, the rule remains in effect.

Question 20

The procedures used by administrative agencies in fulfilling their basic functions is known as

Accepted Answer

The administrative process refers to the procedures used by administrative agencies to fulfill their basic functions, including rulemaking, adjudication, and enforcement of regulations.

Quiz 40: Administrative Agencies

The Federal Trade Commission (FTC) orders General Sales Company to reveal certain information. The firm complains to a court, arguing that the order is an abuse of the FTC's discretion. Like other agencies, the FTC can use a subpoena to