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Business Law Chapter 18 Study Guide
True/False
Indicate whether the statement is true or false.
1. The federal government's power to regulate business is gradually
diminishing.
2. California has passed vehicle emissions standards that are stricter than the
federal standards.
3. The SEC was created in the early 1990s to prevent insider trading and
other fraudulent activities.
4. The Toxic Substances Control Act authorizes the FTC to police the
production and use of industrial chemicals.
5. The Clean Water Act set guidelines for dealing with businesses that dump
pollutants into the nation’s waterways.
6. The World Trade Organization is the United Nations agency that regulates
international trade.
7. The rapid rise of industrialism in the 19th century led to an increase in air
and water pollution.
8. The EPA discourages state and local governments from enforcing
enviromental rules rather than letting the federal government do it.
9. The roots of Department of Energy can be traced back to World War II
and the Manhattan Project, which developed the first nuclear weapons.
10. FERC regulates electricity and natural gas in the United States.
Multiple Choice
Identify the choice that best completes the statement or answers the question.
11. Which of the following organizations does NOT regulate business
between countries?
a. The International Law Commission
b. The U.N. Commission on International Trade Law
c. The World Trade Organization
d. The Federal Trade Commission
12. Companies must treat all purchasers equally according to the
a. Securities Act.
c. Robinson-Patman Act.
b. Williams Act.
d. Federal Trade Commission Act.
13. The law making monopolies illegal is called the
a. Sherman Antitrust Act.
c. Sarbanes-Oxley Act.
b. Clayton Antitrust Act.
d. Robinson-Patman Act.
14. The federal agency responsible for protecting the environment is the
a. Clean Air Agency.
c. Environmental and Pollution
Agency.
b. Environmental Protection
d. Federal Trade Commission.
Agency.
15. Automobiles were identified as a major source of air pollution in the
a. Clean Air Act of 1977.
c. Environmental Protection Act
of 1966.
b. Clean Air Act of 1955.
d. Clean Air Act of 1963.
16. The Department of Energy has a dual function: to develop and implement
national policy on energy and responsibility for
a. regulating oil pipeline rates.
c. oil drilling in the United States.
b. the nation’s nuclear energy
d. natural gas regulations.
program.
17. The International Energy Agency is currently working on the
development of
a. new recycling systems.
b. national air and water quality standards.
c. interstate transportation systems for gas and oil.
d. alternate forms of energy.
18. One way the SEC ensures that investors know what they are buying when
purchasing stock is by requiring all companies to provide a(n)
a. prospectus to the SEC.
c. online resource for consumers.
b. letter to each potential
d. list of the corporate board of
stockholder.
directors.
19. The Kyoto Protocol for reducing greenhouse gases
a.
b.
c.
d.
originated in Japan in the early 1900s.
also focus on nuclear energy waste.
have not been passed into law by the United States
were created at a meeting of the FERC.
20. Which act controls takeover bids?
a. the Sarbanes-Oxley Act
c. the FTC Act
b. the Williams Act
d. the Clayton Antitrust Act
Completion
Complete each statement.
21. The federal government's power to regulate business among the states
comes from the ____________________ of the U.S. Constitution.
22. The independent agency that administers federal securities laws is the
____________________.
23. Anti-monopoly statutes are known as ____________________ laws.
24. The ____________________ Act made monopolies illegal.
25. In 1914 Congress passed the ____________________ Act to protect
businesses from the wrongful acts of other businesses.
26. Some state legislatures have passed ____________________ statutes to
protect corporate directors whose companies are involved in takeovers.
27. The ____________________ Act allows the EPA to compel oil storage
plants to be built and to fund strategies for dealing with oil-related
accidents.
28. The ____________________ Act was passed by Congress to guard
against water pollution in the United States.
29. The ____________________ Act allows the EPA to police the
importation of industrial chemicals.
Matching
Match each term with its definition.
a. Commerce Clause
b. security
c. registration statement
d. prospectus
e. monopoly
f. Environmental Protection Agency (EPA)
g. Federal Energy Regulatory Commission (FERC)
h. Nuclear Regulatory Commission (NRC)
i. Securities and Exchange Commission (SEC)
j. Federal Trade Commission (FTC)
30. Detailed view of the stock offering for potential investors
31. A federal agency that regulates nuclear energy
32. Created to protect businesses from the wrongful acts of other businesses
33. A statement in the U.S. Constitution that states that Congress has the
power to regulate commerce among the states
34. General description of the securities and the company making the offer
35. A federal agency that regulates electricity and natural gas
36. Set up to administer federal securities laws
37. The federal agency responsible for protecting the environment
38. A monetary investment that seeks to make a profit solely because of
another's efforts
39. When one person, company, or group controls the market for a product or
service
Short Answer
40. Define environmental law and explain why environmental protection laws
are necessary.