In Deciding Whether an Ad Is Deceptive, Today the FTC

question 47

Multiple Choice

In deciding whether an ad is deceptive, today the FTC basically follows

• A) the reasonable consumer standard.
• B) the ignorant/gullible consumer standard.
• C) a "modified" ignorant-consumer standard.
• D) none of the above.

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Definitions:

Debt Ratio

Debt divided by total assets. A financial ratio measuring the degree to which the firm uses borrowed money.

Total Debt

The sum of all liabilities, both current and long-term, that a company owes to external parties.

Net Worth

The total assets minus total liabilities of an individual or company, indicating financial health and stability.

Operating Income

Earnings before interest and taxes (EBIT), representing the profit a company makes after paying for variable costs of production but before paying interest or tax.