CAS Advertising Ethics & Regulations

Question 1

Which federal agency has primary authority to regulate deceptive advertising practices in the United States?

Accepted Answer

Federal Trade Commission (FTC)

Answer

Federal Communications Commission (FCC)

Answer

Securities and Exchange Commission (SEC)

Answer

Consumer Financial Protection Bureau (CFPB)

Question 2

Under FTC guidelines, when a celebrity endorses a product they have a financial relationship with, what is required?

Accepted Answer

The financial relationship must be clearly disclosed

Answer

The endorsement must be in writing

Answer

The celebrity must have used the product for at least 30 days

Answer

The ad must be labeled 'paid promotion' only on social media

Question 3

What is the primary ethical concern with 'puffery' in advertising?

Accepted Answer

It uses exaggerated subjective claims that cannot be proven

Answer

It makes specific false factual claims

Answer

It targets vulnerable populations with misleading data

Answer

It violates FTC comparative advertising rules

Question 4

Which self-regulatory body in the U.S. advertising industry reviews national advertising claims for truthfulness and accuracy?

Accepted Answer

National Advertising Division (NAD)

Answer

Advertising Standards Council (ASC)

Answer

Interactive Advertising Bureau (IAB)

Answer

American Advertising Federation (AAF)

Question 5

What does the Children's Online Privacy Protection Act (COPPA) primarily restrict in advertising?

Accepted Answer

Collecting personal data from children under 13 without parental consent

Answer

Showing violent content before 10 PM

Answer

Advertising alcohol products near schools

Answer

Using cartoon characters to sell sugary foods

Question 6

Which type of advertising claim requires the advertiser to have substantiation before the ad runs?

Accepted Answer

Objective product performance claims

Answer

Puffery claims

Answer

Brand image claims

Answer

Lifestyle association claims

Question 7

In comparative advertising, what is legally required to avoid FTC action?

Accepted Answer

Claims must be truthful, substantiated, and not misleading

Answer

Approval from the competitor being compared

Answer

The comparison must only reference price, not quality

Answer

Both brands must have equal ad spend in the same campaign