Question 1

Which of the following programs is more likely to be the most controversial of all the Federal Trade Commission's programs?

Accepted Answer

Corrective advertising can be the most controversial of all the Federal Trade Commission's programs as it forces advertisers to run corrective ads admitting that they previously misled consumers. This can damage the credibility of the brand and may also impact sales. It is often seen as a punitive action taken by the FTC, which can attract controversy and criticism from advertisers.

Question 2

The _____ is a federal agency that was founded in 1934 to regulate broadcast communication that include the radio,television,telephone and telegraph industries.

Accepted Answer

The Federal Communications Commission (FCC) was founded in 1934 to regulate communication industries like radio, television, telephone, and telegraph. The agency is responsible for implementing regulations related to fair competition and ethical behavior in these industries.

Question 3

In 1996,President Clinton signed an executive order declaring that nicotine was an addictive drug and gave the _____ broad jurisdiction to regulate the advertising of cigarettes and smokeless tobacco.

Accepted Answer

The executive order signed by President Clinton in 1996 gave broad jurisdiction to regulate the advertising of cigarettes and smokeless tobacco to the Food and Drug Administration (FDA). Therefore, option D is the correct choice as it represents the agency given this authority. The other options listed, such as the U.S. Postal Service or Bureau of Alcohol, Tobacco and Firearms, do not have the jurisdiction or authority to regulate tobacco advertising.

Question 4

The FTC program that requires an advertiser who is found guilty of false or misleading advertising claims to run ads to rectify the situation is known as:

Accepted Answer

The program that requires an advertiser who is found guilty of false or misleading advertising claims to run ads to rectify the situation is known as corrective advertising.

Question 5

A(n)_____ is an agreement to stop engaging in a particular practice for settlement purposes only and does not constitute an admission of guilt by the advertiser.

Accepted Answer

A consent order is an agreement between the advertiser and the regulatory agency that they will stop the practice in question for settlement purposes only, and it does not constitute an admission of guilt by the advertiser. A cease-and-desist order, on the other hand, is a legal order requiring the advertiser to stop engaging in a particular practice, and an injunction is a court order requiring the advertiser to stop or start a particular action. Ad substantiation agreements and affirmative disclosure orders are not typically used to address practices that require advertisers to agree to stop something.

Question 6

Federal Trade Commission's (FTC's)???_____ program required advertisers to have supporting documentation for their claims and to prove the claims are truthful.

Accepted Answer

The advertising substantiation program requires advertisers to have supporting documentation for their claims and to prove the claims are truthful.

Question 7

Under the Children's Television Act,:

Accepted Answer

The Children's Television Act limits advertising on children's programs to 12 minutes per hour on weekdays and 10.5 minutes per hour on weekends. The other choices are incorrect: A) advertising aimed at children is not prohibited, but limited; C) broadcasters are required to provide time for opposing viewpoints on important issues, but it is not the main focus of the act; D) limits on advertising per hour targeted to children are not eliminated, but regulated by the act; E) the FCC is granted the right to fine broadcasters who fail to meet the requirements of the act, not advertisers.

Question 8

Critics of the FTC's ad substantiation program argue that:

Accepted Answer

Critics of the FTC's ad substantiation program argue that advertisers will resort to puffery (exaggerated or vague statements) in their advertising to avoid the need for claim verification. This may result in misleading or deceptive claims being made in advertisements, which can harm consumers.

Question 9

Under which of the following FTC programs might a firm be required to have product information verifying the veracity of its advertising claims before making any advertising claims about the product?

Accepted Answer

Advertising substantiation is a program under the FTC that requires firms to have product information verifying the truthfulness of their advertising claims before making any such claims about the product. The program aims to ensure that advertisers have adequate proof of the claims they make about their products, and to prevent false or misleading advertising.

Question 10

Under the Reagan administration,the controversial _____ Doctrine,which required broadcasters to provide time for opposing viewpoints on important issues,was repealed on the grounds that it was counterproductive.

Accepted Answer

The Fairness Doctrine required broadcasters to provide time for opposing viewpoints on important issues, and was repealed during the Reagan administration on the grounds that it was counterproductive.

Question 11

The Federal Trade Commission requires advertising for any product that is sweetened with saccharin to contain a warning that saccharin may be hazardous to one's health.This requirement falls under the FTC's _____ requirement.

Accepted Answer

The answer of The Federal Trade Commission requires advertising for...

Question 12

The origin of the Federal Trade Commission's corrective advertising program came from a deceptive advertising case involving:

Accepted Answer

The answer of The origin of the Federal Trade Commission's...

Question 13

Under the FTC's program of ____,Novartis Corporation was required to run advertising informing consumers that it could not substantiate its claim that Doan's pills were superior to other over-the-counter analgesics in treating back pain.The FTC wanted to make sure consumers were not under any false impression that Doan's was a superior medication.

Accepted Answer

The situation described in the question is that Novartis Corporation was required to run corrective advertising by the FTC. This means that the company had made false or misleading claims about their product, Doan's pills, and the FTC wanted to correct those claims through advertising that clarified the truth. Therefore, the correct program under which this situation falls is corrective advertising.

Question 14

Cease-and-desist orders:

Accepted Answer

Cease-and-desist orders are issued by the Federal Trade Commission (FTC). These orders require the recipient to stop engaging in practices that violate consumer protection laws or regulations enforced by the FTC.

Question 15

Which of the following statements about a consent order is true?

Accepted Answer

Consent orders are the most common way for the FTC to resolve inquiries with advertisers. They are a legally binding agreement that the advertiser will stop engaging in the alleged deceptive or unfair practices outlined by the FTC. The advertiser is not required to admit guilt, and it is not handed over to the U.S. Department of Justice if they refuse to sign. Consent orders can also be more beneficial for advertisers than going to court, as they can avoid the possibility of larger penalties and negative publicity. They typically include provisions for monitoring and reporting to ensure compliance with the order.

Question 16

Federal Trade Commission's advertising substantiation program requires advertisers to substantiate their claims:

Accepted Answer

The FTC's advertising substantiation program requires advertisers to substantiate their claims before the ad appears. Advertisers must have a reasonable basis for their claims at the time they make them, and this requirement applies to all forms of advertising, including TV commercials, radio ads, print ads, online ads, and social media ads.

Question 17

The ____ has been heavily involved in the regulation of advertising of prescription drugs.

Accepted Answer

The Food and Drug Administration (FDA) is responsible for regulating the advertising of prescription drugs in the United States. The FDA ensures that prescription drug advertising is truthful and not misleading to the public. The other options - Better Business Bureau, U.S. Postal Service, U.S. Department of Welfare, and Federal Communications Commission - do not have regulatory authority over prescription drug advertising.

Question 18

Under the Wheeler-Lea Amendment,the Federal Trade Commission is empowered to stop an advertiser from making a specified claim within 30 days and refrain from doing so until a hearing is held.This is known as:

Accepted Answer

The described power of the FTC is a cease-and-desist order, which prohibits the advertiser from making a certain claim until a hearing is held. The other options do not accurately match the provided description.

Question 19

Under the _____ Doctrine,the Federal Communications Commission (FCC)required stations to run commercials about the harmful effects of smoking.

Accepted Answer

The Fairness Doctrine required broadcasters to present controversial issues of public importance and to do so in a manner that was honest, equitable, and balanced. This included running commercials about the harmful effects of smoking.

Question 20

The _____ is the government agency that has authority over the labeling,packaging,branding,ingredient listing and advertising of packaged foods and drug products.

Accepted Answer

The Food and Drug Administration is the government agency that oversees the labeling, packaging, branding, ingredient listing and advertising of packaged foods and drug products in the United States. The other options, such as the Federal Trade Commission or Bureau of Alcohol, Tobacco, and Firearms, have different areas of jurisdiction and do not specifically handle food and drug regulations.

Quiz 18: Regulation of Advertising and Promotion