86) If a business files a complaint with the NAD of the Council of Better Business Bureaus
claiming that one of its competitors has unfairly and deceptively depicted the business in an ad,
the NAD will:
A) issue a cease and desist order if it finds the ad is indeed deceptive and misleading.
B) investigate the ad to determine if the FTC Act has been violated.
C) collect information and evaluate data concerning the complaint to determine if the advertiser’s
claims can be substantiated.
D) refer the case to the Federal Trade Commission since it involves a business filing the
complaint.
Question Tag: Critical Thinking
AACSB Category: Reflective thinking
Objective: 14-4
87) If the National Advertising Division finds an advertisement has not been properly
substantiated, the NAD normally will:
A) issue a consent order.
B) issue a cease and desist order.
C) refer the case to the FTC for regulatory action.
D) ask the advertiser to modify the ad or discontinue using the ad.
Question Tag: Definition (Concept)
AACSB Category: Ethical understanding and reasoning
Objective: 14-4
88) An appeal of a decision by the NAD goes to the:
A) United States Court of Appeals.
B) Federal Trade Commission.
C) National Advertising Review Board.
D) Federal Communications Commission.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-4
21
89) The NARB of the Council of Better Business Bureau is composed of:
A) consumers and legal experts on advertising law.
B) judges and law professors from various universities.
C) advertising professionals and CEOs of major corporations.
D) advertising professionals and civic individuals.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-4
90) If the NARB rules against an advertiser, it will:
A) order the firm to discontinue the ad in a manner similar to the consent order of the FTC.
B) ask the firm to modify the ad or discontinue using it.
C) refer the case to the FTC.
D) refer the case to the NAD.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-4
91) If the NARB rules against an advertiser, it will issue an order that will be very similar to a:
A) consent order of the Federal Trade Commission.
B) cease and desist order of the Federal Trade Commission.
C) corrective advertising order of the Federal Trade Commission.
D) judgment of the U.S. Court of Appeals.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-4
92) If a case is appealed from the National Advertising Review Board, it would go to the:
A) NAD.
B) U.S. Court of Appeals.
C) FTC.
D) administrative board of the CBBB.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-4
22
93) Which industry agency monitors all forms of advertising directed toward children?
A) National Advertising Division
B) Children’s Advertising Review Unit
C) Federal Trade Commission
D) Council of Better Business Bureaus
Question Tag: Definition (Concept)
AACSB Category: Ethical understanding and reasoning
Objective: 14-4
94) Which agency monitors websites that involve children younger than 13 years of age?
A) National Advertising Review Board
B) Federal Communications Commission
C) National Advertising Division
D) Children’s Advertising Review Unit
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-4
95) In addition to handling complaints about advertising to children, which agency also
prescreens ads directed to children?
A) Advertising Self-Regulatory Council
B) Federal Communications Commission
C) National Advertising Division
D) Children’s Advertising Review Unit
Question Tag: Definition (Concept)
AACSB Category: Ethical understanding and reasoning
Objective: 14-4
96) The advantages of using industry-based agencies to resolve advertising complaints rather
than governmental agencies, such as the FTC, include all of the following except:
A) cases are normally heard sooner and at a lower cost.
B) the disputes are resolved quicker and are seldom referred to the FTC.
C) cases are heard by judges with experience in handling advertising cases.
D) it does not involve any civil penalties and no legal action can be taken.
Question Tag: Critical Thinking
AACSB Category: Reflective thinking
Objective: 14-4
23
97) The most common and well-known advertising and marketing industry regulatory agencies
are all part of the FTC.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-4
98) The Council of Better Business Bureaus is an industry regulatory resource that is available to
consumers, but not businesses. Businesses must use the FTC to file complaints.
Question Tag: Definition (Concept)
AACSB Category: Reflective thinking
Objective: 14-4
99) A complaint filed with the National Advertising Division of the Council of Better Business
Bureaus regarding an unsubstantiated advertising claim would be dismissed because
substantiation is not a criterion.
Question Tag: Definition (Concept)
AACSB Category: Reflective thinking
Objective: 14-4
100) In investigating a complaint about deceptive advertising, the role of the NAD is to collect
information and evaluate data concerning the complaint to determine whether the advertiser’s
claim is properly substantiated.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-4
101) If a complaint concerning false or misleading advertising is referred to the Better Business
Bureau, the complaint would first be heard by the National Advertising Review Board (NARB).
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-4
24
102) Cases that are not settled by the NAD are referred to the Federal Trade Commission.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-4
103) The National Advertising Review Board is composed of advertising professionals and
prominent civic individuals.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-4
104) If the National Advertising Review Board rules that a firm’s advertisements are not
substantiated, then the NARB orders the firm to discontinue the ads. This is very similar to the
cease and desist order of the FTC.
Question Tag: Definition (Concept)
AACSB Category: Reflective thinking
Objective: 14-4
105) The National Advertising Review Board seldom refers cases to the FTC.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-4
106) The Children’s Advertising Review Unit (CARU) of the CBBB investigates and monitors
all forms of advertising in all media directed toward children younger than 18 years of age.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-4
107) The CARU of the Council of Better Business Bureaus monitors online privacy practices of
websites that involve children younger than 13 years of age.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-4
25
108) The Children’s Advertising Review Unit of the CBBB operates in a manner similar to the
National Advertising Division of the CBBB in terms of handling complaints.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-4
109) In addition to handling complaints about advertising to children, the National Advertising
Review Board (NARB) now prescreens ads directed to children.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-4
110) Cases filed with one of the agencies in the Council of Better Business Bureaus are normally
heard sooner and are less costly than cases filed with the FTC.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-4
111) Identify the primary industry agencies that assist in regulating the marketing and advertising
industry. Explain the primary function of each.
Question Tag: Definition (Concept)
AACSB Category: Ethical understanding and reasoning
Objective: 14-4
26
112) Business ethics are:
A) beliefs or principles that individuals hold concerning what is right and what is wrong.
B) moral principles that individuals hold concerning what is right and what is wrong.
C) moral principles that serve as guidelines for both individuals and organizations.
D) beliefs or principles that serve as guidelines for both individuals and organizations.
Question Tag: Definition (Concept)
AACSB Category: Ethical understanding and reasoning
Objective: 14-5
113) Concerns and criticisms regarding advertising include the following except advertising:
A) causes people to buy more than they can afford.
B) leads to socialism.
C) overemphasizes materialism.
D) increases the costs of goods and services.
Question Tag: Critical Thinking
AACSB Category: Ethical understanding and reasoning
Objective: 14-5
114) Concerns and criticisms regarding advertising include all of the following except
advertising:
A) to children is unethical.
B) is often offensive.
C) perpetuates stereotyping of males, females, and minority groups.
D) leads to greater levels of governmental regulation.
Question Tag: Critical Thinking
AACSB Category: Ethical understanding and reasoning
Objective: 14-5
115) Critics of the beer industry and marketers agree on all of the following statements about
alcohol and underage individuals except:
A) many beer commercials encourage underage drinking.
B) many beer commercials encourage brand loyalty or brand switching to a population that
should not even be drinking.
C) the use of sex and humor in beer ads has made alcohol appealing to underage individuals.
D) the public service announcements discourage underage drinking.
Question Tag: Critical Thinking
AACSB Category: Ethical understanding and reasoning
Objective: 14-5
27
116) Which statement below about the advertising of underwear, sexually-related products,
feminine hygiene products, and male enhancement products is false?
A) In Islamic countries, the advertising of personal hygiene and sexually-related products would
be highly offensive.
B) It is important for marketing professionals to create advertisements that are not offensive.
C) The use of nudity and sexuality featuring teens and children has been highly criticized.
D) In recent years, there has been a decline in sensitivity towards child molestation, child
pornography, and related sexual issues.
Question Tag: Critical Thinking
AACSB Category: Reflective thinking
Objective: 14-5
117) Morals are beliefs or principles that serve as guidelines for both individuals and
organizations.
Question Tag: Definition (Concept)
AACSB Category: Ethical understanding and reasoning
Objective: 14-5
118) Ethics are moral principles that serve as guidelines for both individuals and organizations.
Question Tag: Definition (Concept)
AACSB Category: Ethical understanding and reasoning
Objective: 14-5
119) One common complaint of advertising is that it causes people to buy more than they can
afford.
Question Tag: Definition (Concept)
AACSB Category: Ethical understanding and reasoning
Objective: 14-5
120) Many social commentators suggest that advertising and other forms of marketing perpetuate
negative stereotypes of males, females, and minorities.
Question Tag: Definition (Concept)
AACSB Category: Ethical understanding and reasoning
Objective: 14-5
28
121) The practice of restricting advertising of alcohol and tobacco products raises the questions
of free speech and the freedom for a business to advertise its products, regardless of what those
products are.
Question Tag: Critical Thinking
AACSB Category: Ethical understanding and reasoning
Objective: 14-5
122) Ads featuring underwear, condoms, and feminine hygiene products may be offensive to
some people, which has led to regulations restricting when and where the ads can be placed.
Question Tag: Definition (Concept)
AACSB Category: Ethical understanding and reasoning
Objective: 14-5
123) While sex sells, marketers must be careful and use good judgment in creating ads that are
not offensive.
Question Tag: Critical Thinking
AACSB Category: Ethical understanding and reasoning
Objective: 14-5
124) Children are an attractive market segment for advertisers because children spend so much
money each year.
Question Tag: Definition (Concept)
AACSB Category: Ethical understanding and reasoning
Objective: 14-5
125) One reason marketing professionals target ads to children is that they can be easily
influenced.
Question Tag: Definition (Concept)
AACSB Category: Ethical understanding and reasoning
Objective: 14-5
29
126) Identify the primary concerns and criticisms of advertising.
Question Tag: Definition (Concept)
AACSB Category: Ethical understanding and reasoning
Objective: 14-5
127) When a company creates a brand name that closely resembles a popular or successful
brand, it may be:
A) brand infringement.
B) domain infringement.
C) domain squatting.
D) brand parity.
Question Tag: Definition (Concept)
AACSB Category: Ethical understanding and reasoning
Objective: 14-6
128) The practice of purchasing internet domains that are valuable to other people, companies, or
organizations is:
A) brand infringement.
B) domain infringement.
C) domain squatting.
D) brand parity.
Question Tag: Definition (Concept)
AACSB Category: Ethical understanding and reasoning
Objective: 14-6
30