Test Bank for Andersons Business Law and the Legal Environment 21st Edition by Twomey

Test Bank for Andersons Business Law and the

Legal Environment 21st Edition by Twomey

To download the complete and accurate content document, go to:

https://testbankbell.com/download/test-bank-for-andersons-business-law-and-the-leg
al-environment-21st-edition-by-twomey/

Visit TestBankBell.com to get complete for all chapters

Chapter 6—ADMINISTRATIVE AGENCIES

TRUE/FALSE

1. An administrative agency is a governmental body charged with administering and implementing

legislation.

ANS: T MSC: AACSB Analytic

2. Administrative agencies may make the rules, police the community to see the rules are obeyed, and sit
in judgment to determine violations of their rules.

ANS: T MSC: AACSB Analytic

3. Because administrative agencies have broad powers, they are subject to strict procedural rules as well
as disclosure requirements.

ANS: T MSC: AACSB Analytic

4. The modern administrative agency typically possesses legislative, executive, and judicial powers.

ANS: T MSC: AACSB Analytic

5. The Sunshine Act requires most meetings of major administrative agencies to be open to the public.

ANS: T MSC: AACSB Analytic

6. Administrative agencies must be rigidly controlled and cannot be granted discretionary authority.

ANS: F MSC: AACSB Analytic

7. Until proven valid, a rule adopted by an administrative agency is invalid.

ANS: F MSC: AACSB Analytic

8. In an emergency, an administrative agency can act beyond the scope of the statute that created it.

ANS: F MSC: AACSB Analytic

9. The Freedom of Information Act provides access to any information upon request.

ANS: F MSC: AACSB Analytic

10. The public has access to the activity of administrative agencies in three ways: (1) open records, (2)
open meetings, and (3) public announcement of agency guidelines.

ANS: T MSC: AACSB Analytic

11. The Administrative Procedure Act is a federal law that establishes the operating rules for
administrative agencies.

ANS: T MSC: AACSB Analytic

12. Modern administrators cannot make laws, but they can argue persuasively before Congress for the
passage of needed legislation.

ANS: F MSC: AACSB Analytic

13. Administrative agencies never allow members of the industry that is to be regulated to participate in
rule-making deliberations.

ANS: F MSC: AACSB Analytic

14. A federal agency planning to adopt a new regulation must give public notice of such intent and then
hold a hearing at which members of the public may express their views and make suggestions.

ANS: T MSC: AACSB Analytic

15. Regulations properly adopted by agencies are important, but they do not have the full force of law as
do statutes.

ANS: F MSC: AACSB Analytic

16. The Federal Register lists all administrative regulations, presidential proclamations, and executive
orders on a semiannual basis.

ANS: F MSC: AACSB Analytic

17. An administrative agency has the power to investigate, to require persons to appear as witnesses, to
require witnesses to produce relevant papers and records, and to bring proceedings against those who
violate the law.

ANS: T MSC: AACSB Analytic

18. Agency investigations of possible violations of agency rules are handled through independent
enforcement agencies.

ANS: F MSC: AACSB Analytic

19. Administrative agencies are not subject to the constitutional protections afforded individuals and
businesses.

ANS: F MSC: AACSB Analytic

20. An administrative agency is barred from examining the records of a business enterprise by the
constitutional guarantee against unreasonable searches and seizures.

ANS: F MSC: AACSB Analytic

21. Within the area in which the administrative agency is authorized to make decisions, the agency can be
regarded as a specialized court or court of limited jurisdiction.

ANS: T MSC: AACSB Analytic

22. An administrative agency cannot hold a hearing without a jury.

 ANS: F MSC: AACSB Analytic

23. In an administrative hearing, an administrative law judge hears the complaint and has the authority to
swear witnesses, take testimony, make evidentiary rulings, and make a decision to recommend to the
administrative agency heads for action.

ANS: T MSC: AACSB Analytic

24. Administrative agencies generally are not subject to the rules of evidence.

ANS: T MSC: AACSB Analytic

25. A consent decree is an informal settlement of an enforcement action brought by an administrative

agency.

ANS: T MSC: AACSB Analytic

26. Before an appeal can be taken to a court concerning a determination of an agency, all administrative
remedies must be exhausted.

ANS: T MSC: AACSB Analytic

27. A court will not reverse an agency’s decision merely because the court would have made a different
decision based on the same facts.

ANS: T MSC: AACSB Analytic

28. Decisions made by agencies are more likely to be reversed than to be accepted by the court on appeal.

ANS: F MSC: AACSB Analytic

29. As Courts now tend to accept an agency’s reasonable interpretation of a statute involving a technical
matter, even though it was not the only interpretation that could have been made.

ANS: T MSC: AACSB Analytic

30. An administrative agency whose erroneous decision causes a regulated person or enterprise substantial
loss is liable for such loss regardless of whether the agency acted in good faith.

ANS: F MSC: AACSB Analytic

MULTIPLE CHOICE

1. The most recent addition to the American governmental structure is the:

a. executive branch.
b. administrative agency.
c. judicial branch.
d. legislative branch.
ANS: B MSC: AACSB Analytic

2. An administrative agency can be created to perform:

 a. only one of the three functions of government (executive, legislative, or judicial).
b. any two of the three functions of government.
c. all three of the functions of government.
d. none of the three functions of government.
ANS: C MSC: AACSB Analytic

3. Members of administrative agencies are ordinarily

a. pre-selected.
b. elected.
c. assigned.
d. appointed.
ANS: D MSC: AACSB Analytic

4. Generally, which power(s) does (do) an administrative agency possess?

a. all powers necessary to effectively perform the duties entrusted to it
b. legislative only
c. judicial only
d. executive only
ANS: A MSC: AACSB Analytic

5. The Freedom of Information Act:

a. is to be strictly construed to prevent unauthorized disclosures.
b. has too many exemptions to be of any use.
c. is intended to subject agency action to public scrutiny.
d. puts the burden of proof upon the person requesting the information.
ANS: C MSC: AACSB Analytic

6. Meetings are to be open to the public under the guidelines of the Sunshine Act of 1976. Meetings
include:
a. those of federal administrative agencies.
b. those of state administrative agencies.
c. those actions that are deemed "meetings" by the agency.
d. both a and b.
ANS: D MSC: AACSB Analytic

7. In reviewing agency action, courts generally apply the:

a. “beyond a reasonable doubt” standard.
b. “preponderance of the evidence” standard.
c. “arbitrary and capricious” standard.
d. “rational relationship” standard.
ANS: C MSC: AACSB Analytic

8. An administrative regulation:
a. is a guideline that may be voluntarily followed.
b. has the force of law.
c. is a suggestion of what will protect the environment.
d. is a standard used to guide an industry at the industry’s discretion.
ANS: B MSC: AACSB Analytic
 9. The term "exhaustion of administrative remedies" means that:
a. parties to an agency action must be diligent in pursuing their case.
b. parties to an administrative action must take their appeal to a court of law.
c. parties to an administrative action can appeal only after the agency has made a final
decision.
d. administrative agencies tend to work very hard.
ANS: C MSC: AACSB Analytic

10. The “public comment” period for proposed administrative agency rules must be at least __________
days.
a. 30
b. 60
c. 90
d. 120
ANS: A MSC: AACSB Analytic

11. A regulation adopted by a federal administrative agency is binding only if:

a. it has been printed in the Federal Register.
b. the persons affected have received copies of it.
c. the persons affected have notified the agency of their approval of the regulation.
d. publicity has been given to it by the news media.
ANS: A MSC: AACSB Analytic

12. Which of the following is part of an administrative agency’s power to investigate?

a. an investigation to determine whether additional administrative rules need to be adopted
b. an investigation to ascertain facts with respect to a particular suspected or alleged violation
c. an investigation to determine whether the defendant in a proceeding before the agency is
complying with its final order
d. all of the above
ANS: D MSC: AACSB Analytic

13. Concerning administrative investigations:

a. agencies are severely limited by the constitutional protection against unreasonable
searches and seizures.
b. a search warrant is always required to search premises.
c. papers and records generally may be subpoenaed by an agency.
d. a person does not have constitutional protection against unreasonable searches and
seizures.
ANS: C MSC: AACSB Analytic

14. The United States constitution places the most significant limitations on administrative investigation in
the area of:
a. search and seizure of the person.
b. aerial inspection.
c. search and seizure of papers and records.
d. guarantee against self-incrimination.
ANS: A MSC: AACSB Analytic

15. A subpoena to testify or to produce records:

a. is prohibited by the constitutional guarantee against unreasonable searches and seizures.
 b. is an illegal attempt to gain information by compulsion.
c. cannot be opposed on the grounds that such a request constitutes an unreasonable search
and seizure.
d. must be approved by corporate officers to be effective.
ANS: C MSC: AACSB Analytic

16. An administrative agency:

a. is not empowered to act as a court with regard to its own regulations.
b. acts as a specialized court of limited jurisdiction.
c. can hear complaints only in the presence of a jury.
d. cannot impose penalties for violation of its regulations.
ANS: B MSC: AACSB Analytic

17. Which statement is true concerning administrative hearings?

a. An existing business has the right to challenge the granting of a license to a potential
competitor.
b. Denial of a jury trial is a denial of due process.
c. It is generally necessary to give notice of an administrative hearing and to allow affected
persons to be present.
d. Traditional courtroom rules of evidence must be applied.
ANS: C MSC: AACSB Analytic

18. Which of the following is beyond the enforcement power of an agency?

a. requiring proof of compliance with agency regulations
b. issuing a cease-and-desist order
c. convicting of criminal violations
d. imposing civil penalties
ANS: C MSC: AACSB Analytic

19. Due process requires that a hearing generally be held before an agency may make a judicial decision:
a. in all actions.
b. when the action affects the community generally.
c. when the action concerns a class of persons.
d. when the action concerns only the persons directly affected.
ANS: D MSC: AACSB Analytic

20. A significant difference between an administrative agency hearing and a court hearing is that:
a. a binding decision can only be made by an agency.
b. there is no right of trial by jury before an agency.
c. a court hearing allows no public intervention.
d. a court can enforce its decision.
ANS: B MSC: AACSB Analytic

21. A(n) __________ is a negotiated disposition of a matter before an administrative agency, generally
without public sanctions.
a. formal settlement
b. informal settlement
c. judicial verdict
d. quasi-judicial verdict
 ANS: B MSC: AACSB Analytic

22. Which of the following is true about judicial review of agency action?
a. Judges tend to substitute their own judgment for that of the agency.
b. Agency interpretation and application of the law are subject to "de novo" review.
c. An agency decision will not be reversed in the absence of an error of law or a clear abuse
of, or the arbitrary or capricious exercise of, discretion.
d. All of the above
ANS: C MSC: AACSB Analytic

23. Under modern law, when the issue that an agency decides is a question of law based on a technical
statute:
a. the court on appeal will reverse the agency’s decision if the court disagrees with the
decision.
b. the court will not accept the agency's decision unless the agency's interpretation is the only
one that could have been made.
c. the court will tend to accept the agency's interpretation of the law as long as it is
reasonable.
d. the court will not reverse the agency's decision.
ANS: C MSC: AACSB Analytic

24. Ordinarily, a court will __________ an agency’s decision to do nothing about a particular complaint.
a. not reverse
b. reverse
c. remand
d. none of the above
ANS: A MSC: AACSB Analytic

25. If an agency causes a substantial loss to a business by enforcement of its laws, that business:
a. always may hold the agency liable for damages.
b. never can hold the agency liable for damages.
c. may seek damages if the agency acted in bad faith.
d. may seek damages if the agency complied with its own guidelines.
ANS: C MSC: AACSB Analytic

CASE

1. The Federal Trade Commission suspects Billy Williams of unlawful trade activities and has obtained
evidence, claimed to be proof of unlawful activity, by way of aerial photography. The FTC is also
currently seeking the submission of various documents, within Williams' place of business, for
additional evidence. Williams refuses to submit to the demands to produce the documents and claims
that this demand and the aerial photos are direct violations of his constitutional rights. Williams also
demands a jury trial to clear him of charges levied. Comment on Williams' claims.

ANS:
Test Bank for Andersons Business Law and the Legal Environment 21st Edition by Twomey

An agency has the power to execute the law and to bring proceedings against violators. This may be
accomplished with no significant constitutional limitations on how the agency is to conduct its
investigation of infractions. A search warrant is never required for subject matter observed from a
public place; therefore, aerial photography of Williams' place of business can be used by the FTC as
proof of wrongdoing. The FTC may also demand the production of relevant papers and documents by
Williams, since the constitutional guarantee against unreasonable searches and seizures does not afford
much protection with regard to papers and records being investigated by an agency. Lastly, Williams
has no right to a jury trial in an administrative hearing.

MSC: AACSB Reflective Thinking | AACSB Analytic

2. Arthur sustained an injury to his back. Arthur claimed the injury was suffered at work and filed a claim
for workers' compensation benefits. The employer opposed this claim, saying the injury, if real, was
the result of a congenital condition. In accordance with the statute, a hearing was held before the
Workers' Compensation Board, which ruled against Arthur. Arthur became disgusted with the hearing
officer and the proceedings because Arthur felt that the hearing officer did not like him. Arthur has
consulted an attorney seeking to sue for workers' compensation benefits. An appeal is available within
the agency, but Arthur wants to go directly to court because he feels that the agency appeal would be
useless. Discuss the merits of this strategy.

ANS:
Arthur cannot bring a lawsuit to overturn the findings of the Worker’s Compensation Board, since
Arthur has failed to exhaust his available administrative remedies. The lawsuit would be unsuccessful
and would not be heard by the courts.

MSC: AACSB Reflective Thinking | AACSB Analytic

3. Wilma was an employee of the Electric Storage Battery Company. She was fired. She claimed that she
was fired because she was a member of a labor union. The employer asserted that she was fired
because she was a poor worker. Wilma filed an unfair labor practice complaint with the National
Labor Relations Board. Its examiner held a hearing at which evidence was presented showing that
Wilma was a poor worker. Other evidence presented showed that the employer was opposed to labor
unions. The Board decided to believe Wilma's witnesses and concluded that she had been fired
because she belonged to the union. Can the employer appeal this decision?

ANS:
Yes. The employer has the right to appeal the decision. This right is conferred by statute. On the facts
as stated, however, the employer will lose the appeal because the decision turns upon the decision of
which witnesses to believe. If the witnesses on behalf of the employee are believed, there was an
unfair labor practice. When the administrative agency selects one set of witnesses to believe, a court
hearing an appeal will not reverse the conclusion of the agency. The court will only examine the case
to see if there was a substantial basis for the agency’s findings of fact. There was evidence on both
sides which, if believed, would be sufficient to justify a conclusion in favor of each side. The court
will not go further to see if it would have agreed with what the agency believed. That is, the court will
not substitute its own opinion when a case turns upon the credibility of witnesses who testified before
the agency.

MSC: AACSB Reflective Thinking | AACSB Analytic

Visit TestBankBell.com to get complete for all chapters