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Q:
Administrative agencies may be empowered to develop and issue regulations.
Q:
Congress may not delegate its authority to administrative agencies.
Q:
Final administrative rules do not have binding legal effect.
Q:
The Federal Trade Commission is an independent administrative agency.
Q:
All federal agencies are part of the legislative branch of government.
Q:
Congress creates federal administrative agencies.
Q:
The president of the United States creates administrative agencies by issuing signed executive orders.
Q:
Administrative law includes administrative rules.
Q:
Future Data Corporation would like to know what information federal agencies have about Future Data's operations, so that the firm will know what its competitors may be able to learn about it. Under what federal law can Future Data require the agencies to disclose whatever information they may have concerning it?
Q:
Administrative agencieslike the Securities and Exchange Commission, the Federal Trade Commission, and the Food and Drug Administrationmake rules. What are these rules called, and how binding are they? What must such a rule NOT do?
Q:
The Internal Revenue Service (IRS) is a federal agency. The State Department of Taxation and Finance (DTF) is a state agency. The County Revenue Department (CRD) is a local agency. If the actions of these agencies conflict, the actions that will prevail are those of
a. the CRD.
b. the DTF.
c. the IRS.
d. none of the above.
Q:
The Regulatory Flexibility Act has helped reduced the paperwork burdens of Standard Paint Company and other small business firms in the area of
a. accounting practices.
b. asset acquisition.
c. hazardous waste management.
d. tax reporting.
Q:
With some exceptions, every portion of every meeting of the Federal Communications Commission and other federal administrative agencies must be open to public observation under
a. no federal or state law.
b. the Freedom of Information Act.
c. the Government-in-the-Sunshine Act.
d. the Public Accountability Act.
Q:
Executive control over the power of the National Labor Relations Board, and other agencies, may be exercised through a presidential veto of
a. Congress's modifications of the agency's authority.
b. the agency's final rules.
c. the agency's final orders.
d. none of the above.
Q:
Limitations on the powers of the Securities and Exchange Commission, and other administrative agencies, include
a. review by courts of administrative agency actions.
b. political restrictions imposed by Congress and the executive branch.
c. legislation such as the Administrative Procedure Act.
d. all of the above.
Q:
Blaster Company, a fireworks manufacturer, is charged with having made products with gunpowder charges many times greater than that allowed by the National Safety Agency. The administrative law judge orders Blaster to stop making its supercharged fireworks. Blaster may
a. appeal to the commission that governs the agency.
b. appeal to Congress, which created the agency.
c. appeal to a different, separate agency.
d. ignore the order.
Q:
The Equal Employment Opportunity Commission files a complaint against General Construction Corporation (GCC). GCC may want to settle the dispute, before formal adjudicatory proceedings begin, to avoid
a. the appearance of being uncooperative.
b. incurring substantial legal costs to contest the proceedings.
c. the disclosure by the agency of information acquired during the period in which the company has been regulated.
d. all of the above.
Q:
The National Labor Relations Board (NLRB) investigates Product Manufacturing Company for its alleged interference in on-site union elections. The matter goes before an administrative law judge who is nominally a member of the NLRB. Safeguards that exist to help guarantee the impartiality of the judge include
a. the prohibition of private communications between the judge and anyone who is a party to the proceedings.
b. the protection of the judge from agency discipline except on a showing of good cause.
c. the separation of the judge in the agency's organization from the investigative and prosecutorial staff.
d. all of the above.
Q:
The Internal Revenue Service (IRS) wants to seize certain documents of Investment Properties, Inc. Deciding whether it is permissible for the IRS to request or seize the documents depends on whether the documents are
a. incriminating.
b. relevant.
c. technical.
d. valuable.
Q:
The Federal Trade Commission (FTC) wants Great Business Company to produce certain financial records for review. To obtain the records, the FTC will issue
a. an order for specific performance.
b. a rule for parol evidence.
c. a subpoena ad testificandum.
d. a subpoena duces tecum.
Q:
The Food and Drug Administration (FDA) is investigating reports that Gamma Pharmaceutical Corporation is putting potentially harmful additives in Hyacinth, a new pain-relief medication. The FDA's demands for particular documents from Gamma
a. must be specific, but there is no limit on its burdensomeness.
b. must not be unduly burdensome, but it need not be specific.
c. must be specific and not unduly burdensome.
d. need not be specific and there is no limit on its burdensomeness.
Q:
To notify the public of a proposed rule, the Nuclear Regulatory Commission, like other federal agencies, publishes it
a. in a nationally distributed newspaper.
b. in a trade journal available to members of the industry.
c. in the Federal Register.
d. on a public television station.
Q:
The National Transportation Safety Administration uses notice-and-comment rulemaking. This includes
a. notice, a comment period, and publication of the final rule.
b. notice only.
c. opportunity for comments by interested parties only.
d. publication of a final draft of the rule only.
Q:
The U.S. Fish and Wildlife Service utilizes notice-and-comment rulemaking. This involves a period during which
a. judges, legislators, and the president are asked about a proposed rule.
b. potential violators of a proposed rule are notified and publicized.
c. the administrators "notice" a problem and "comment" on it.
d. the public is asked to comment on a proposed rule.
Q:
The Federal Communications Commission (FCC) plans to adopt new regulations to govern Internet-based phone services. Before drafting the regulations, the FCC may not
a. amend the Administrative Procedure Act to streamline proceedings.
b. hold hearings to acquire facts pertinent to the proposed rules.
c. order manufacturers to provide certain documents.
d. solicit testimony from interest groups and consumers.
Q:
The ultimate legal basis for all administrative law, including the regulations of the Occupational Safety and Health Administration, is found in
a. the Administrative Procedure Act.
b. the Declaration of Independence.
c. the U.S. Constitution.
d. the New Deal.
Q:
The Merit Systems Protection Board issues a rule. Like other administrative agencies' legislative rules, or substantive rules, this rule is as
a. binding as a law passed by Congress.
b. persuasive as an expert's opinion.
c. suggestive as a newspaper's editorial.
d. unenforceable as a salesperson's puffery.
Q:
Independent regulatory agencies such as the Federal Trade Commission are
a. not part of the government's executive branch.
b. outside the major departments of the government's executive branch.
c. subagencies of executive agencies.
d. subject to more executive authority than executive agencies.
Q:
Most federal administrative agencies, like the Food and Drug Administration, are usually created following
a. the issuance of an executive order by the president.
b. the order of a federal court.
c. the passage of enabling legislation by Congress.
d. the promulgation of a regulation by an administrative agency.
Q:
With respect to the objectives of Congress, the principal role of the Small Business Administration and other federal administrative agencies is to
a. act independently of those goals.
b. create new goals.
c. eliminate those goals.
d. implement the goals.
Q:
The priority among conflicting federal and state laws is based on the supremacy clause of the U.S. Constitution.
Q:
A state may create an agency as a parallel to a federal agency to provide similar services on a local basis.
Q:
An agency must conduct a regulatory flexibility analysis of any new regulation.
Q:
Congress can review new federal regulations before they take effect.
Q:
Every part of most meetings of a federal agency must be open to public observation.
Q:
Judicial review of administrative agency actions is required.
Q:
An administrative law judge rules only on questions of fact, not questions of law.
Q:
An administrative agency will generally initiate an administrative action against an organization by undertaking formal adjudication.
Q:
Administrative agencies can obtain information through on-site searches and seizures.
Q:
Administrative agencies may be required to show that information requested during the course of an investigation is relevant.
Q:
A subpoena duces tecum is an order to an individual or organization to hand over certain records, papers, or books.
Q:
Notice-and-comment rulemaking is the most common rulemaking process used by administrative agencies.
Q:
The Administrative Procedure Act imposes requirements on administrative review and rulemaking.
Q:
Congress may delegate some of its authority to administrative agencies.
Q:
The U.S. Constitution provides the legal basis for administrative agencies.
Q:
Administrative rules are not as binding as the laws that Congress enacts.
Q:
Congress issues legislative rules when it creates an administrative agency.
Q:
The Federal Trade Commission is an independent regulatory agency.
Q:
Enabling legislation is passed by an administrative agency before it begins any regulatory activities.
Q:
State administrative regulations may regulate areas not covered by federal rules.
Q:
Diana and Earl incorporate their computer technical support business as Fast Aid, Inc. Diana contracts with Gina to respond to Fast Aid's customer service calls on a commission basis. What are the advantages and disadvantages to Fast Aid of classifying Gina as an independent contractor rather than as an employee? Earl obtains a loan from First National Bank and signs a promissory note for repayment of the amount without indicating that he is doing so on behalf of Fast Aid. Fast Aid does not make enough profit its first year to make payments on the loan. Charging default, the bank files a suit against Earl for the unpaid amount. Earl responds that he was acting on behalf of Fast Aid. Will the bank succeed against Earl? Why or why not?
Q:
Winnie opened her first Xtreme Sportz outlet six years ago. To open outlets in more locations, Winnie needs capital and wants to attract investors. How can she do this?
Q:
Sally's Salon & Day Spa hires only independent contractors such as Tina as workers. This hiring practice allows the employer to avoid
a. all laws governing employment relationships.
b. all laws governing employment relationships except tax-withholding requirements.
c. all laws governing employment relationships except those prohibiting employment discrimination.
d. no laws governing employment relationships.
Q:
Alpha, Inc., fires Beth, who applies to Consolidated Company for a job. Consolidated asks Alpha to make a statement about the reason for Beth's termination. Alpha might be held liable for making
a. a negative statement only.
b. a positive statement only.
c. a negative statement or a positive statement.
d. neither a negative nor a positive statement.
Q:
Quality Electronics Stores sell goods to consumers on credit. Under the Truth-in-Lending Act, Quality must
a. assess interest on its customers' overdue balances.
b. charge its customers extra for making late payments.
c. disclose how interest on late payments is calculated.
d. itemize goods sold on its customers' receipts.
Q:
Nick designs a new office-management software program and incorporates Nick's Niche, Inc., to make and market it. To sell a limited number of shares of stock in Nick's Niche to the public, the firm must register the shares with
a. a lawyer with securities law expertise.
b. a venture capitalist.
c. the Securities and Exchange Commission.
d. the U.S. Patent and Trademark Office.
Q:
Alpha Corporation's attempt to raise $1 million from a few select investors is
a. a buy-sell agreement.
b. a key-person investment.
c. a private offering.
d. a public offering.
Q:
To protect its trade secrets, Innovative Processes, Inc. (IPI), may require employees that have access to the secrets to agree in their employment contracts not to
a. compete with IPI.
b. memorize the trade secrets.
c. quit working for IPI.
d. think about the trade secrets after work.
Q:
Fact Pattern 42-1
Eve opens Fine Gardens, a landscape design and care service. Later, GreaTV, Inc., broadcasts "Fine Gardens!" on television, focusing on negative aspects of nature. Eve files a suit against GreaTV, alleging that the show devalues the goodwill of her service.
Refer to Fact Pattern 42-1. According to the reasoning in Case 42.2, Playmakers, LLC v. ESPN, Inc., the court is most likely to base its ruling on
a. the common attributes of landscape design and care, and nature.
b. the likelihood that the public will be confused.
c. the similarity of the two marks.
d. the unlikelihood that the public will be confused.
Q:
Fact Pattern 42-1
Eve opens Fine Gardens, a landscape design and care service. Later, GreaTV, Inc., broadcasts "Fine Gardens!" on television, focusing on negative aspects of nature. Eve files a suit against GreaTV, alleging that the show devalues the goodwill of her service.
Refer to Fact Pattern 42-1. Under the decision in Case 42.2, Playmakers, LLC v. ESPN, Inc., the court is most likely to
a. award damages to Eve.
b. deny Eve's request for relief.
c. enjoin further broadcasts of "Fine Gardens!"
d. order GreaTV to change the title of "Fine Gardens!"
Q:
Mick starts a business to market nationally long-distance phone time as Mick's Minutes. Registering his trademark with the U.S. Patent and Trademark Office provides nationwide protection for the mark
a. only if the mark is currently in use.
b. only if the mark is not yet in use but will be within six months.
c. if the mark is currently in use or will be in use within six months.
d. under any circumstances.
Q:
When Micro Company is incorporated in New York, the secretary of state of New York approves Micro's name as a trade name. This approval is legal permission to own the name
a. only in New York.
b. only in the United States.
c. only in the United States and other countries in North America.
d. throughout the world.
Q:
Greg and Holly decide to open a restaurant and operate the business as a corporation. At the directors' initial meeting, the directors may
a. adopt articles of incorporation only.
b. adopt bylaws only.
c. choose a corporate name only.
d. adopt articles of incorporation, adopt bylaws, and choose a name.
Q:
Lee wants to begin importing athletic shoes under the corporate name Mercury, Inc. Mercury should include most of its corporate rules in
a. the articles of incorporation.
b. the bylaws.
c. the corporate charter.
d. the minutes of the first meeting of the board of directors.
Q:
Beth wants to incorporate Chop Shop, her motor vehicle repair business. Incorporating requires filing, with the appropriate state office,
a. a copy of the corporate liability insurance policy.
b. a corporate name.
c. corporate bylaws.
d. nothing.
Q:
B2B, Inc., an inventory management firm, is a corporation. Cody is one of B2B's ownersa shareholder. If Cody's dies, B2B
a. automatically terminates.
b. continues in business.
c. dissolves unless the other owners agree to continue.
d. distributes Cody's shares to the other shareholders.
Q:
Joy and Kurt want to open a comedy supplies shop as Jo-Kur, with the anticipation of opening other shops in the near future. To attain limited liability for the lowest cost and the fewest start-up formalities, their best option is to form
a. a corporation.
b. a limited liability company.
c. a limited partnership.
d. a sole proprietorship.
Q:
Gary operates Happy Campin", a resort on Idle Lake, as a limited liability company. This form of business organization protects from liability Gary's
a. business and personal assets.
b. business assets only.
c. neither business nor personal assets.
d. personal assets only.
Q:
Glen is starting a small bakeryHealthy Breadsand is considering whether to organize the business as a limited liability company or a limited liability partnership. Both forms
a. are subject to the same flexibility restrictions as S corporations.
b. do not limit their owners' personal liability for business debts.
c. limit their owners' personal liability for business obligations.
d. obviate the need to obtain insurance for business liability risks.
Q:
Dona and Egan operate First Rate Investments as a general partnership. Gail, a customer slips and breaks her ankle in a First Rate and is awarded damages by a court. Those damages must be paid by
a. Dona and Egan only.
b. Dona, Egan, and First Rate.
c. First Rate only.
d. Gail only.
Q:
Pam opens Quik Express, a local delivery service. Unless Pam expressly adopts a certain form of business organization, the law considers Quik to be
a. a corporation.
b. a limited liability company.
c. a partnership.
d. a sole proprietorship.
Q:
Donna is starting a financial planning business. She hires Ed, an attorney, to handle the initial paperwork. The advantages of retaining an attorney at this point in a business include the lawyer's
a. business contacts only.
b. confidentiality only.
c. legal and business expertise only.
d. business contacts, confidentiality, and legal and business expertise.
Q:
Misclassifying an employee as an independent contractor can result in considerable tax liability imposed on an employer.
Q:
An employer's promises of job security are never binding.
Q:
Hiring independent contractors avoids the application of laws governing employment relationships.
Q:
To charge interest on an overdue account, a business must make certain disclosures relating to those charges before entering into the contract.
Q:
A contract should be in writing so that if a dispute arises, there will be written evidence of the terms.
Q:
Key-person insurance protects against the risk that a key employee may resign.
Q:
A "take-along right" allows an investor to take specific items of corporate property along with his or her purchase of an interest in the business.
Q:
A shareholder agreement defines the owners' rights and interests.