A Carpet Cleaning Firm Runs a Newspaper Ad Stating: "Special

question 150

Multiple Choice

A carpet cleaning firm runs a newspaper ad stating: "Special this month only! Three rooms of carpet cleaned for $39.95!" In each of the next ten months, the firm runs the same ad. A consumer advocacy group files suit against the carpet cleaning firm, contending that the ad is deceptive. The suit charges that the ad makes it seem as though the $39.95 price is a special price that will increase at the end of the month, when in reality, the price never changes. The U. S. federal law governing this type of situation is the:

• A) Robinson-Patman Act.
• B) Clayton Act.
• C) Sherman Act.
• D) Magnuson-Moss Act.
• E) Wheeler-Lea Amendment.

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Definitions:

Sarbanes-Oxley Act

U.S. federal law enacted to protect investors from fraudulent accounting activities by corporations. It mandates strict reforms to enhance financial disclosures and prevent accounting fraud.

Securities Fraud

A type of serious white-collar crime that can involve deceiving investors or manipulating financial markets.

Imprisoned

The state of being confined in a prison as a form of punishment for committing a crime or in detention while awaiting trial.

Exclusionary Rule

A legal principle in the United States that prohibits the use of evidence collected or analyzed in violation of the defendant's constitutional rights.