Chapter 4
Constitutional Authority to
Regulate Business
N.B.: TYPE indicates that a question is new, modified, or unchanged, as follows.
N A question new to this edition of the Test Bank.
+ A question modified from the previous edition of the Test Bank.
= A question included in the previous edition of the Test Bank.
TRUE/FALSE QUESTIONS
A1. The state governments retain all powers not specifically delegated to the federal
government.
A2. Under their police powers, states can regulate only public activities, such as political
demonstrations.
A3. National legislation governs nearly every major business activity, including conduct
that has nothing to do with commerce.
A4. The checks and balances in the U.S. Constitution prevent any one branch of
government from exercising too much power.
A5. Congress can regulate all commerce in the United States.
A6. The Constitution expressly excludes state regulation of commerce.
A7. When there is a direct conflict between a federal and a state law, the state law is
rendered invalid.
A8. Whether the federal government has preempted a certain area is always clear.
A9. The taxing and spending clause of the U.S. Constitution has had a greater impact on
business than any other clause in the Constitution.
NAT: AACSB Analytic AICPA Legal
A10. Some constitutional protections apply to business entities.
A11. The First Amendment does not protect corporate political speech.
A12. The First Amendment does not protect commercial speech as extensively as
noncommercial speech.
A13. The establishment clause of the U.S. Constitution prohibits the federal government
from promoting a religion.
A14. A law that has any impact on religion is unconstitutional.
A15. The right to due process of law applies to corporations.
A16. A law that regulates economic matters violates the equal protection clause.
A17. Procedural due process requires that any government decision to take a person’s
property must be made fairly.
A18. A law that discriminates based on gender must substantially relate to an important
government objective to be valid.
A19. There is a specific guarantee of a right to privacy in the Constitution.
