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Test #1 -- Chapters 1-5Study Guide - BUS 121 - Test date: 11 Sept – 15 SeptChapter 1Crimes are prosecuted by the government, not individuals.TrueCrimes are prosecuted not by individuals but by the state or federal government.Another name for case law is common law.TrueAn alternative name for case law is common law.Case law interpretations are law unless they are revoked later by new statutory law.TrueCase law interpretations are law unless they are revoked later by new statutory law.Constitutions and statutes are complete in the sense of covering the detailed rules that affect government and business relations.FalseConstitutions and statutes are never complete in the sense of covering all the detailed rules that affect government and business relations.Presidents clam the power to issue executive orders on the basis of their Article II, Section 1, constitutional power to “take care that the laws be faithfully executed.”TruePresidents claim the power to issue executive orders on the basis of their Article II, Section 1, constitutional power to “take care that the laws be faithfully executed.”Which of the following involves disputes between private individuals or groups and their government?Public LawPublic law involves disputes between private individuals or groups and their government.Which of the following applies to situations in which someone commits an act against the public as a unit?Criminal LawCriminal law applies to situations in which someone commits an act against the public as a unit.Assume a businessperson who owns a computer equipment store is delinquent in paying rent to the landlord. The resulting dispute entails ______ law.Private LawPrivate law involves disputes between private individuals or groups.A computer store dumps waste behind its building in violation of local, state, or federal environmental regulations, the results dispute focuses on ______ law.Public LawPublic law involves disputes between private individuals or groups and their government.Crimes committed under criminal laws are prosecuted by which of the following?The state or federal governmentCrimes are prosecuted not by individuals but by the state or federal government.Assume the Securities and Exchange Commission (SEC) prosecutes someone for insider trading. That prosecution is an example of ______ law.Criminal LawOne example of a criminal law is the prohibition against insider trading on the stock exchange.The ______ is the supreme law of the land.U.S. ConstitutionThe U.S. Constitution is the supreme law of the land, the foundation for all laws in the United States. Established in Article VI, Clause 2, known as the Supremacy Clause.The rules and regulations put forth by legislatures are referred to as ______ law.Statutory LawThe assortment of rules and regulations put forth by legislatures is what we call statutory law.Legislative acts passed by the U.S. Congress can be found in ______.The U.S. CodeLegislative acts can be found in the United States Code when they are passed by Congress.Case law can be revoked by ______.New statutesCase law is law unless revoked later by new statutory law.The ______ is a significant body of law to business activities including sales, banking and warranty.Uniform Commercial Code (UCC)The Uniform Commercial Code laws include sales laws and other regulations affecting commerce, such as bank deposits and collections, title documents and warranties.When courts rely on precedent, they are obeying ______.Stare decisisWhen courts rely on precedent, they are obeying stare decisis (“standing by their decision”).Assume an issue is decided by a state supreme court. On what cases is that decision binding?The decision being appealed from and future cases in the state, but not past cases.A state supreme court’s decision affects only the decision being appealed and any future cases brought in the state on that particular subject.Which of the following is true regarding administrative agencies?Administrative agencies exist at the federal, state, and local level.The federal government, as well as state and local governments, has dozens of administrative agencies, whose task is to perform a particular government function.Candy wants to start an Internet business. She is told by the Chinese government that certain items on her site are objectionable and illegal, and that if she wants to do business in China, she must remove the objectionable material. Which of the following is true?If Candy wants to do business in China, she must abide by Chinese law.Business managers need to be aware of various trade laws and restrictions in different countries so that they can act accordingly when they set out to do business in those countries.Chapter 2A court must have several types of jurisdiction to decide any particular case.TrueA court must have several types of jurisdiction to decide any particular case.State courts have the power to hear all cases not within the exclusive jurisdiction of the federal court system.TrueState courts have the power to hear all cases not within the exclusive jurisdiction of the federal court system.The defendant responds to a complaint with an answer.TrueThe defendant responds to the complaint with an answer.The term ADR refers to the resolution of legal disputes through methods other than litigation.TrueThe term ADR refers to the resolution of legal disputes through methods other than litigation, such as mediation, arbitration, summary jury trials, minitrials, neutral case evaluations, and private trials.Early neutral case evaluation provides a binding ruling by a neutral.FalseWith early neutral case evaluation, the parties select a neutral third party and explain their respective positions to this neutral, who then evaluates the strengths and weaknesses of the case. The parties use this evaluation to reach a settlement.A defendant in a lawsuit is to be provided by the plaintiff with a copy of the complaint. That process is called ______.Service of processService of process is the procedure by which courts present these summons and complaint to defendants.Susan, a resident of Illinois, ran a traffic light while traveling in Michigan and did significant damage to Paul’s car. Paul obtains a judgment against her, but Susan has no insurance and no assets except for a farm in Alabama. Which of the following is true?A court in Illinois can exercise quasi in rem jurisdiction over the farm and authorize its sale. Any excess over Paul’s amount of damages would go to Paul for his trouble.Courts can gain quasi in rem jurisdiction, or attachment jurisdiction, over a defendant’s property unrelated to the plaintiff’s claim.***This answer is given as correct by the McGraw-Hill website, but differs greatly from the example given in the book. ***Which of the following is needed for diversity-of-citizenship?Both that the plaintiff and the defendant reside in different states and that the controversy concerns an amount in excess of $75,000.A diversity-of-citizenship case must satisfy two conditions: (1) the plaintiff(s) does (do) not reside in the same state as the defendant(s), and (2) the controversy concerns an amount in excess of $75,000.How many circuits does the U.S. Courts of Appeal have?12The Unites States has 12 circuits, including a circuit for the District of Columbia.Which of the following are written questions that one party sends to another to answer under oath?InterrogatoriesInterrogatories are written questions that one party sends to another to answer under oath.At a[n] ______ attorneys examine a witness under oath with a court reporter present.DepositionAt a deposition, attorneys examine a witness under oath; and a court reporter (stenographer) records every word the witness and attorneys speak.Which of the following is a type of ADR?MediationThe term ADR refers to the resolution of legal disputes through methods other than litigation, such as negotiation, mediation, arbitration, summary jury trials, initials, neutral case evaluation, and private trials.The arbitrator typically provides a decision within ______ days of an arbitration hearing.30 daysThe arbitrator typically provides a decision within 30 days of the arbitration hearing.Which of the following are reasons that an arbitration award may be set aside under the Federal Arbitration Act?The arbitrator failed to make a final and definite award, the award was the basis of fraud, or the arbitrator displayed bias.The Federal Arbitration Act (FAA), the federal law enacted to encourage the use of arbitration, explicitly lists four grounds on which an arbitrator's award may be set aside: (1) The award was the result of corruption, fraud, or other undue means; (2) the arbitrator displayed bias or corruption; (3) the arbitrator refused to postpone the hearing despite sufficient cause, refused to hear relevant evidence, or otherwise misbehaved to prejudice the rights of one of the parties; (4) the arbitrator exceeded his or her authority or failed to use that authority to make a mutual, final, and definite award.Which of the following is[are] positive about arbitration?Arbitration is less expensive generally than litigation.Arbitration may be preferable to litigation for several reasons. First, arbitration is more efficient and less expensive. Second, parties have more control over the process of dispute resolution through arbitration. They choose the arbitrator and determine how formal the process will be. Third, the parties can choose someone to serve as the arbitrator who has expertise in the specific subject matter. Fourth, the arbitrator has greater flexibility in decision making than a judge has. Unlike judges, who are bound by precedent, arbitrators generally do not have to offer reasons for their decisions.What type of dispute resolution process is med-arb?A process in which the parties agree to start out in mediation and, if the mediation is unsuccessful on one or more points, to move to arbitration.Med-arb is a dispute resolution process in which the parties agree to start out in mediation and, if the mediation is unsuccessful on one or more points, to move on to arbitration.In which of the following do parties select a neutral third party and explain their respective positions to the neutral, who then evaluates the strengths and weaknesses of the case?Early neutral case evaluationWith early neutral case evaluation, the parties select a neutral third party and explain their respective positions to this neutral, who then evaluates the strengths and weaknesses of the case.Which of the following in an ADR method in which a referee is selected and paid by the disputing parties to offer a legally binding judgment in a dispute?Private trialsSeveral states allow private trials, an ADR method in which a referee is selected and paid by the disputing parties to offer a legally binding judgment in a dispute.Which of the following is the supreme court of appeal in England?The House of LordsIn England the House of Lords is the supreme court of appeal.Which of the following did the U.S. Supreme Court rule in Hertz Corp. v. Friend as the appropriate test for determining a corporation’s principal place of business for purposes of diversity jurisdiction?The “nerve center” testFor purposes of federal-court diversity jurisdiction, a corporation’s “principal place of business” refers to the place, often called the “nerve center,” from which the corporation’s high level officers directed, controlled and coordinated corporation’s activities.Chapter 3Administrative law consists of procedural, but not substantive, rules.FalseAdministrative law consists of the substantive and procedural rules.There is no right to a jury in administrative agency disputes.TrueMatters are heard only by an ALJ (Administrative Law Judge), as there is no right to a jury trial in administrative process.There is no right of appeal from a decision of an administrative law judge.FalseAn appeal to the full commission or the head of the agency may then be filed and that decision may be appealed to the circuit court of appeals.The Small Business Administration is an example of an executive agency.TrueThe Small Business Administration is an executive agency, Exhibit 3-1.The primary type of rule making used by administrative agencies is informal rule making.TrueThe primary type of rule making used by administrative agencies is informal rule making, or notice-and-comment rule making.Which of the following is generally defined as any body created by the legislative branch to carry out specific duties?An administrative agencyAn administrative agency is generally defined as any body created by the legislative branch (e.g., Congress, a state legislature, or a city council) to carry out specific duties.What types of powers do administrative agencies have?Legislative, judicial, and executiveAgencies have three types of power: legislative, judicial, and executive.Federal administrative agencies are created by Congress through passage of ______ legislation, which is a statute that specifies the name, functions, and specific powers of the administrative agency.EnablingAdministrative agencies are created by Congress through passage of enabling legislation, which is a statue that specifies the name, functions, and specific powers of the administrative agency.What do the initials ALJ represent in the administrative law arena?Administrative Law JudgeAn administrative law judge is known as an ALJ.Which of the following is false regarding executive agencies at the federal level?The administrative head of an executive agency is appointed by the president with the advice and consent of the U.S. House of Representatives.The administrative head of an agency is appointed by the president with the advice and consent of the U.S. Senate. The Senate is constitutionally bound to offer “advice and consent” as stated in Article II, Section 2, Clause 2, called the “Advice and Consent Clause”.Which of the following is a term used to refer to agencies that do not clearly fall into either the classification of an executive agency or the classification of independent agency?HybridSome agencies do not fall clearly into one classification or the other. These agencies are typically referred to as hybrid agencies.Under which of the following does each concerned interest group and the agency send representatives to bargaining sessions lead by a mediator with any agreement forwarded to the agency?Reg-negIn regulated rule making, often referred to as reg-neg, each concerned interest group and the agency itself sends a representative to bargaining sessions lead by a mediator with any agreement forwarded to the agency.Which of the following is involved when an agency is referred to as a “captured” agency?A belief that agency officials are unduly influenced by past ties to the industry regulated by the agency.There is some concern that it will be difficult for regulators to ignore their past ties to industry and pass regulations that are in the public interest, especially when the regulations would increase costs to the industry or are opposed by the industry for other reasons. When people are discussing an agency in which they perceive this problem as existing, they often refer to the agency as being a "captured" agency.How many days, if any, does Congress have in which to review proposed agency rules?60 daysIn 1996 legislation was signed into law that gives Congress 60 days to review proposed agency rules.In order to be upheld in court, an agency’s fact finding must be supported by which of the following?Substantial evidenceCourts typically defer to an agency’s fact finding, but the facts must be supported by substantial evidence.Which of the following are rules that explain how the agency views the meaning of the statutes for which the agency has administrative responsibility?Interpretive Interpretive rules are rules that explain how the agency views the meaning of the statutes for which the agency has administrative responsibility.Which of the following is an order issued by an agency to appear at a particular time and place and provide testimony?A subpoenaA subpoena is an order to appear at a particular time and place and provide testimony.Parties in a dispute before an administrative law judge may reach a settlement via a[n]______.Consent orderThe ALJ will try to convince the parties to reach a settlement via a consent order.Agencies are classified as either ______ or ______.Executive; IndependentAgencies are classified as either executive or independent.Executive agencies are referred to as which of the following?Cabinet-level agenciesExecutive agencies are referred to as cabinet-level agencies.Chapter 4Federal laws include laws passed by federal administrative agencies.TrueFederal laws include rules passed by federal administrative agencies.Congress can use its spending power to achieve social welfare goals.TrueAs with its power to tax, Congress can use its spending power to achieve social welfare objectives.When can government agents obtain a search warrant?When they establish probable ernment officials can obtain search warrants only if they can show probably cause to believe that the search will uncover specific evidence of criminal activity.Which of the following are types of due process?Procedural and substantive due process, but not independent due process.The due process clause guarantees two types of due process: procedural and substantive.Which of the following is an example of the state’s exercise of its police power?The enactment of criminal laws, building codes, zoning laws, sanitation standards for restaurants, and regulations for the practice of medicine.Police power consists of the residual powers retained by each state to safeguard the health and welfare of its citizenry. Typical exercises of a state's police power include state criminal laws, building codes, zoning laws, sanitation standards for restaurants, and regulations for the practice of medicine.Sam is engaged in the criminal activity of growing marijuana in his home. A couple of police officers while randomly passing through the neighborhood saw Sam go to the mailbox. They thought that he looked a little scruffy, and they were concerned that they had not made a sufficient number of arrests in the past month. They decided to "check out" Sam. Therefore, they immediately broke down Sam's door, searched his home, and arrested him. The police officer in charge told Sam that because marijuana was involved, he lost his rights against self-incrimination and that he might as well confess. Sam proceeded to confess to growing marijuana and a number of other crimes. The judge was so angry with Sam that he threw him in jail for two months without any kind of hearing. Sam's lawyer, who just graduated from law school, is not sure if the police acted legally in Sam's case by breaking down the door. Which of the following is true on that issue?The police violated Sam’s Fourth Amendment rights.A search is unreasonable if the government official conducting the search does not first obtain a search warrant from a court.New State passes a law prohibiting the importation of out-of-state apples in order to help in-state growers. Which of the following is the best argument for the out-of-state growers who wish to challenge the new law?That it violates the dormant commerce clause.If a law substantially interferes with interstate commerce, it is generally unconstitutional. This restriction on states' authority to pass laws that substantially affect interstate commerce is called the dormant commerce clause.According to the ______ Amendment to the Constitution, all powers that the Constitution neither gives exclusively to the federal government nor takes from the states are reserved for the states.Tenth AmendmentAccording to the Tenth Amendment to the Constitution, all powers that the Constitution neither gives exclusively to the federal government nor takes from the states are reserved for the states.According to the principle of federalism established by the U.S. Constitution, how is the authority to govern allocated?It is divided between federal and state governments.The U.S. Constitution establishes a system of government based on the principle of federalism, according to which the authority to govern is divided between federal and state governments.Which amendment protects freedom of religion?First AmendmentThe First Amendment contains two provisions that protect citizens’ freedom of religion.The constitution of Belarus requires everyone to protect the environment.TrueThe constitution of Belarus requires everyone to protect the environment.The primary source of authority for federal regulation of business is the First Amendment to the U.S. Constitution.FalseThe primary source of authority for federal regulation of business is the commerce clause, located in Article I, Section 8, of the ConstitutionWhat does the Fifth Amendment’s protection against self-incrimination mean?That a person does not have to be a witness against himself or herself in a criminal case, period.The Fifth Amendment protects against self-incrimination, meaning that in a criminal case, the defendant does not have to testify in court as a witness against himself or herself.When may government agents search without a search warrant?When law enforcement officials believe it likely that the items sought will be removed before they can obtain a warrant.When law enforcement officials believe it is likely that the items sought will be removed before they can obtain a warrant, they may conduct a search without a warrant.The first ______ amendments to the U.S. Constitution are known as the Bill of Rights.TenThe first 10 amendments to the U.S. Constitution, known as the Bill of Rights, substantially affect government regulation of business.Which of the following is an exception to the rule that administrative searches usually require search warrants?The pervasive-regulation exceptionUnder the pervasive-regulation exception, if an industry has a long history of pervasive regulation, a warrantless search is not unreasonable. In such industries, administrative agencies can use warrantless searches to ensure that firms uphold regulations.Judicial review allows courts to review the constitutionality of lower courts’ decisions.TrueJudicial review allows courts to review the constitutionality of lower courts’ decisions.The U.S. Constitution allocates the power of the federal government among ______ branches of government.ThreeIn addition to allocating authority between state and federal governments, the Constitution allocates the power of federal government among the three branches of government: executive, legislative, and judicial.Which amendment provides that the government cannot infringe on citizens’ right to bear arms?SecondThe Second Amendment states that government cannot infringe on citizens’ right to bear arms, Exhibit 4-1What does the Fifth Amendment’s takings clause reference?The requirement that the government pay the owner just compensation if the government wants to take the private property for public use.The Fifth Amendment provides that when government takes private property for public use, it must pay the owner just compensation, or fair market value, for the property.Chapter 5Which of the following is a plea in which the defendant does not admit guilt but agrees not to contest the charges?Nolo contendereA defendant may also enter a plea of nolo contendere, whereby the defendant does not admit guilt but agrees not to contest the charges.Penny planned to spray paint her ex-boyfriend's new car and other vehicles in his neighborhood, but was apprehended by a quick thinking police officer in the neighborhood just before she started spraying. The officer, new to the job, forgot to read Penny her Miranda rights. The prosecutor should rely on the "public safety" exception to the requirement that Miranda rights be read.TrueIn?New?York?v.?Quarles, the Court created a "public safety" exception to the Miranda rights allowing statements to be used at trial, even if a person was not informed of his or her Miranda rights, if the need to protect the public is served by the admissibility of the statements in question.Which of the following is an example of the imposition of strict liability?A business sells cigarettes to a minorLiability without fault would apply, for example, if a business were to sell cigarettes or alcohol to a minor.Which of the following is a federal law providing extended penalties for criminal acts performed as a part of an ongoing criminal organization?The Racketeer Influenced and Corruption Organizations Act (RICO)The Racketeer Influenced and Corrupt Organizations (RICO) Act is a U.S. law that provides extended penalties for criminal acts performed as part of an ongoing criminal organization.Strict liability is a term used to describe which of the following?Liability without faultStrict liability is a legal term for responsibility for damages regardless of the existence of negligence, or liability without fault.The Foreign Corrupt Practices Act prohibits foreign officials from entering the U.S. to conduct illegal business.FalseThe FCPA prohibits payments to foreign officials to corruptly influence an official act or decision or to influence a foreign government.Which of the following is true regarding the Fourteenth Amendment?It extends most constitutional rights to defendants at state levelThe Fourteenth Amendment extends most constitutional rights to defendants at the state level.In general, China punishes government officials convicted of accepting bribes less severely than the U.S.FalseChina passed a new law whereby officials found guilty of extortion and accepting bribes are subject to life imprisonment or possibly put to death.Of which of the following must a defendant be informed before questioning?That the defendant has the right to consult with an attorney before speaking to the policeBefore questioning an office must inform the defendant of the following: "You have the right to consult an attorney before speaking to the police and have an attorney present during any questioning now or in the future."Heidi decided to make extra money by offering to do investments for her friends for a fee. She actually did no investing, but used the funds from new friends to pay off earlier enrollees. This worked well for a while, but her scheme came to light when her supply of new friends came to an end. She is guilty of which of the following practices?Operating a Ponzi schemeA Ponzi scheme is an investment swindle in which high profits are promised from fictitious sources and early investors are paid off with funds raised from later ones.Which of the following is the making of an entry into the books of a bank or corporation that is designed to represent the existence of funds that do not exist?False entriesThe crime of "false entries" is the making of an entry into the books of a bank or corporation that is designed to represent the existence of funds that do not exist.Which of the following occurs when a defendant makes a first appearance?A magistrate determines whether there was probably cause for the arrestAfter the prosecutor files the complaint, the defendant makes the first appearance, which is the appearance before a magistrate who determines whether there was probable cause for the arrest.Which of the following is true regarding corporate executives being held personally liable for business crime?Corporate executives may be found personally liable for a business crime regardless of whether the business crime was committed for personal benefit of the corporationThe beneficiary of the crime is irrelevant, as corporate executives and officers can be found to be personally liable regardless of whether the crimes were committed for their personal benefit or for the benefit of the corporation.Ordinarily, to obtain an arrest warrant, a law enforcement agent must demonstrate that there is ______ that a suspect committed or is planning to commit a crime.Probable causeOrdinarily, to obtain an arrest warrant, the law enforcement agent must demonstrate that there is probable cause, or a likelihood, that a suspect committed or is planning to commit a crime.Which of the following are minor offenses usually punishable by a jail sentence of less than six months or a small fine with an example being violation of a building code?Petty offensesPetty offenses, such as violating a building code, are minor misdemeanors and are usually punishable by a jail sentence of less than six months or a small fine.Which of the following is an investment swindle in which high profits are promised from fictitious sources and early investors are paid off with funds raised from later investors?Ponzi schemeA Ponzi scheme involves an investment swindle in which high profits are promised from fictitious sources and early investors are paid off with funds raised from later ones.Which of the following is using fraudulent means to obtain information about someone’s phone use?PretextingPretexting is using fraudulent means to obtain information about someone's phone use.Which amendment provides the right to a speedy and public trial?The Sixth AmendmentThe Sixth Amendment guarantees the right to a speedy and public trial.Under the common law, a corporation could not be considered a criminal because it was not an actual person and, thus, did not have a mind.TrueUnder the common law, a corporation could not be considered a criminal because it was not an actual person and thus did not have a "mind."If a prosecutor decides not to go forward with a case, the defendant may still be liable for his or her actions in civil court.TrueIf a prosecutor decides not to go forward with a case, the defendant may still be liable for his or her actions in civil court. ................
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