Deck 23: Administrative Agencies

Question 1

Administrative regulations have benefits, but the benefits can entail considerable costs for business.

Answer 1

True

Question 2

The president can limit the power of an administrative agency through the power to appoint its officers.

Answer 2

True

Question 3

Preventing agencies from abusing their powers without hindering the agencies as they carry out their duties is not a governmental concern.

Answer 3

False

Question 4

Final rules do not have binding legal effect until the courts confirm them.

Question 5

Administrative agencies lack the time, the resources, and the expertise to make the detailed decisions required for regulation.

Question 6

In the absence of a challenge, an agency action may be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law."

Question 7

After final rules are issued, administrative agencies no longer conduct investigations of the entities that they regulate.

Question 8

Interested parties are not given the opportunity to express their views on a proposed rule because their efforts might influence agency policy.

Question 9

As the economy has grown more complex, the size of the government has also increased, and so has the number of administrative agencies.

Question 10

Under the Administrative Procedure act, a party seeking judicial review of an agency decision must first exhaust all administrative remedies.

Question 11

Administrative agencies at various levels of government can work together and share the responsibility of creating and enforcing regulations.

Question 12

Because federal agency rules have a binding effect, and their violators may be punished, certain established procedures must be followed in creating them.

Question 13

An informal agency action can be important because it warns regulated entities that the agency may engage in formal rulemaking if its informal policy is ignored.

Question 14

Because the Administrative Procedure Act imposes requirements that all federal agencies must follow, it is an integral part of the administrative process.

Question 15

Although executive agencies exist within the cabinet departments of the executive branch, they are not subject to the authority of the president.

Question 16

New administrative agencies are rarely created in response to a crisis.

Question 17

Legislatures create statutory law and administrative law.

Question 18

By delegating some authority to make and implement laws to an administrative agency, Congress gives up its ability to monitor a particular area.

Question 19

Notice-and-comment rulemaking involves regulators noticing a situation that lacks a rule, commenting on it, and then issuing a rule.

Question 20

Congress can exercise authority over the power of an administrative agency by revising its funding, changing its responsibilities, or abolishing it altogether.

Question 21

There is no single federal office directed to receive comments from small businesses about their dealings with federal agencies.

Question 22

On review of an agency's interpretation of the law, a court is likely to defer to the agency's view, unless the court would have interpreted the law differently.

Question 23

Organic Frozen Foods Corporation is subject to regulations issued by the Food and Drug Administration, which is a federal agency. These regulations are part of the body of

A) administrative law.
B) legislative law.
C) executive law.
D) judicial law.

Question 24

According to the United States Supreme Court, courts should not defer to an administrative agency's interpretation of the law.

Question 25

An agency's interpretation of the law will not be upheld by a court unless it is supported by specific evidence-a reasonable explanation is not enough.

Question 26

The Food and Drug Administration (FDA) is an executive agency. As an executive agency, the FDA is subject to the authority of

A) no government official or entity.
B) the president.
C) state legislatures.
D) the U.S. Attorney General

Question 27

If a business firm refuses to comply with an agency request to inspect facilities or business records, the agency may resort to the use of a subpoena.

Question 28

Information is relevant to an administrative investigation if it assures the agency that the law is not being violated.

Question 29

When a state administrative regulation conflicts with a federal administrative regulation

A) the federal regulation takes precedence.
B) the state regulation takes precedence.
C) a cost-benefit analysis is applied to determine which takes precedence.
D) the regulations are equally valid within their jurisdictions.

Question 30

The purpose of negotiated settlements in disputes over administrative actions is to obtain funds to defray the agency's operating costs.

Question 31

A meeting of a federal agency must be open to public observation if the meeting involves matters relating to future litigation or rulemaking.

Question 32

For an agency's interpretation of the law to be accorded deference by a court, it must meet the formal standards for notice-and-comment rulemaking.

Question 33

The Financial Stability Oversight Council was created in response to a financial crisis to

A) identify and respond to emerging risks in the financial system.
B) protect consumers from abusive practices by financial institutions.
C) issue rules to cover almost every aspect of a business's operation.
D) reduce the number and authority of business financial regulations.

Question 34

An administrative law judge's decision on a dispute over an administrative action is the final order of the agency-no appeal is possible.

Question 35

Under a law addressing public concern over power exercised by federal agencies, the government must disclose certain records to any person on request.

Question 36

Normally, a business firm complies with an agency request to inspect facilities because it is in the firm's interest to maintain good relations with the agency.

Question 37

Independent regulatory agencies such as the Federal Communications Commission are

A) not part of the government's executive branch.
B) outside the federal executive departments.
C) subagencies within the cabinet departments.
D) cabinet departments within the executive branch.

Question 38

An agency must conduct a regulatory flexibility analysis whenever a new regulation will significantly impact a substantial number of small businesses.

Question 39

An administrative law judge does not have the power to rule on questions of evidence or to make determinations of fact.

Question 40

Congress can review new federal regulations only after they take effect.

Question 41

Notice-and-comment rulemaking involves a period during which

A) judges, legislators, and the president are asked about a proposed rule.
B) potential violators of a proposed rule are notified and publicized.
C) the administrators "notice" a problem and "comment" on it.
D) the public is asked to comment on a proposed rule.

Question 42

Data Inc. pays income and other taxes collected by the Internal Revenue Service (IRS). Like other federal administrative agencies, the IRS was created by

A) Congress, through enabling legislation.
B) a court, through the adjudicatory process.
C) an administrative agency, through administrative regulations.
D) the president, through an executive order.

Question 43

Persons who favor the creation of a federal agency to regulate the production of genetically modified agricultural products should concentrate their lobbying efforts on

A) Congress.
B) administrative agencies that oversee agricultural products.
C) the United States Supreme Court.
D) the president of the United States.

Question 44

Retail Stores Inc. pays taxes collected by the appropriate state agencies. Like other state administrative agencies, these agencies were created by

A) a state legislature, through an enabling act.
B) a state court, through the adjudicatory process.
C) a federal administrative agency, through administrative regulations.
D) the state governor, through an executive order.

Question 45

The rules of administrative agencies can be

A) as binding as laws passed by Congress.
B) only as persuasive as experts' opinions.
C) merely as suggestive as media commentary.
D) no more influential than promotional puffery.

Question 46

To notify the public of a proposed rule, the Federal Emergency Management Agency, like other federal agencies, publishes the proposal

A) through a broadcast on a public television station.
B) in a trade journal available to members of the industry.
C) in the Federal Register.
D) on its website.

Question 47

Bath & Kitchen Inc. is subject to a decision by the Consumer Product Safety Commission. Opposed to the decision, the firm wants a court to review it. First, however, the firm must

A) refuse to comply with the agency decision.
B) petition other interested parties to oppose the decision.
C) exhaust all possible administrative remedies.
D) publish its opposition in the Federal Register.

Question 48

The Environmental Protection Agency (EPA) wants Waste Disposal Company to produce certain records for review. The EPA can gain access to the records through

A) an order for specific performance.
B) a rule for parol evidence.
C) a formal complaint.
D) a subpoena.

Question 49

The procedures used by administrative agencies in fulfilling their basic functions is known as

A) the procedural process.
B) the legislative process.
C) the administrative process.
D) the executive process.

Question 50

Tia is a witness in a controversy involving the U.S. Bureau of Tobacco and Firearms. Tia can be compelled to appear before an administrative law judge if she is served with

A) an order for specific performance.
B) an executive order.
C) a subpoena.
D) a search warrant.

Question 51

The Securities and Exchange Commission (SEC) wants to review certain documents of Trade Funds Inc. Whether it is permissible for the SEC to request or review the documents depends on whether the documents are

A) incriminating.
B) relevant.
C) technical.
D) valuable.

Question 52

The Food and Drug Administration (FDA) is investigating reports that Caplets Corporation is putting potentially harmful additives in Doze, a new pain-relief medication. The FDA's demands for particular documents from Caplets

A) must be specific and adequately describe the material being sought.
B) must not be specific or an incriminating item might be overlooked.
C) must be general so as to force an uncooperative party's compliance.
D) may, but need not, be specific because this is only an investigation.

Question 53

The executive branch of the government can exercise control over an administrative agency through

A) the president's veto powers.
B) legislation that takes away the agency's power.
C) judicial review of agency actions and decisions.
D) none of the choices.

Question 54

Delta Water Company is subject to a decision by the Environmental Protection Agency. Delta appeals the decision, arguing that it is arbitrary and capricious. This could mean that the decision

A) changed the agency's prior policy without justification.
B) followed a consideration of all legally appropriate factors.
C) was accompanied by a rational explanation.
D) was plainly warranted by the evidence.

Question 55

The Securities and Exchange Commission decides to create a new rule relating to the dissemination of material nonpublic information through social media. The first step is

A) compile the rule with others in the Code of Federal Regulations.
B) draft the rule.
C) publish a notice of the proposed rulemaking.
D) solicit public comment.

Question 56

The Food and Drug Administration (FDA) wants Pharma Inc. to produce certain records for review. Pharma need not reveal

A) incriminating information.
B) files that are not otherwise required by law.
C) facts that could be used against the firm in a court.
D) trade secrets.

Question 57

The Federal Trade Commission Act granted the Federal Trade Commission the power to

A) oversee the nation's stock exchanges.
B) regulate specific areas of business and industry.
C) prevent businesses from engaging in unfair trade practices.
D) work to eliminate discrimination in skilled occupations.

Question 58

After a final rule is issued, an administrative agency conducts investigations to monitor

A) consumer satisfaction with the rule.
B) affected businesses' satisfaction with the rule.
C) compliance with the rule.
D) the impact of the rule on other administrative agencies.

Question 59

A final rule issued through a notice-and-comment rulemaking procedure has binding legal effect

A) after a court affirms it.
B) until the issuing agency rescinds it.
C) once Congress approves it.
D) unless a court overturns it.

Question 60

The Federal Trade Commission (FTC) orders General Sales Company to reveal certain information. The firm complains to a court, arguing that the order is an abuse of the FTC's discretion. Like other agencies, the FTC can use a subpoena to

A) compel a party to testify, but not to obtain documents.
B) obtain any information except what a party refuses to reveal.
C) harass an uncooperative business or individual.
D) reveal regulatory violations.

Question 61

A failure of the Federal Bureau of Investigation to comply with a request under the Freedom of Information Act (FOIA) may be challenged in

A) a federal district court.
B) a hearing before the U.S. Freedom of Information Agency.
C) a meeting with Congress's FOIA subcommittee.
D) a special conference with the president of the United States.

Question 62

A proceeding in which an administrative law judge hears and decides issues that arise when an agency charges a person or a firm with an agency violation is

A) adjudication.
B) declaration.
C) rulemaking.
D) investigation.

Question 63

Administrative agencies can conduct searches without warrants in

A) all industries.
B) highly regulated industries.
C) no industries.
D) newly regulated industries only.

Question 64

Media Report seeks information about well-known businesspersons under the Freedom of Information Act. To obtain the information, Media Report must

A) agree not to reveal any trade secrets.
B) reasonably describe the information.
C) get a court order.
D) obtain the businesspersons' consent.

Question 65

Omega Company operates a computer chip production plant. Paola is the president of Omega. Rico, a representative of the Occupational Safety and Health Administration, inspects the plant and, citing a certain regulation, orders Omega to take specified steps immediately to improve sanitation at the plant. Paola believes that Rico is either exceeding his authority or that the regulation Rico claims to be enforcing is excessive. Can Omega ask a court for an order to stop enforcement of the regulation? If not, what can Omega do?

Question 66

To be assured that a court will defer to an administrative agency's interpretation of the law, the agency must

A) meet the formal legal standards for notice-and-comment rulemaking.
B) exhaust all administrative remedies.
C) make its records available online and in other electronic formats.
D) open every portion of every meeting to public observation.

Question 67

The U.S. Small Business Administration issues a new regulation that will have a significant impact on a substantial number of small businesses. Under the Regulatory Flexibility Act, the agency must do all of the following except

A) measure the cost that the rule will impose on small businesses.
B) consider less burdensome alternatives.
C) alert small businesses about forthcoming regulations.
D) adjust the rule to the satisfaction of the regulated businesses.

Question 68

Guitar Gear Inc. makes guitars. The Occupational Safety and Health Administration (OSHA) proposes a safety rule governing the handling of wood and its dust in the workplace, including the woods that Guitar Gear uses in its operations. Guitar Gear contends that the rule will involve substantial compliance costs without significantly increasing workplace safety. The firm sends a letter to OSHA indicating its objections to the proposed rule and enclosing research reports and other data supporting those objections. Does OSHA have any obligation to consider these objections? What procedures must OSHA follow when it makes new rules, such as this one?

Question 69

During an administrative hearing, the parties may

A) give testimony.
B) present evidence.
C) cross-examine witnesses.
D) all of the choices.

Question 70

The Federal Emergency Management Agency (FEMA) discovers that Rescue Inc. is violating a FEMA regulation. If this situation is resolved like most such disputes, the outcome will be

A) a negotiated settlement.
B) a trial and a fine.
C) a trial and an appeal to a higher authority.
D) a trial and the dissolution of the business.

Question 71

Closed meetings of the U.S. Bureau of Land Management, a federal administrative agency, are permitted when

A) the subject of the meeting concerns accusing a person of a crime.
B) open meetings would frustrate the implementation of future actions.
C) the subject of the meeting involves matters relating to future rulemaking.
D) all of the choices.

Question 72

The Environmental Protection Agency (EPA) discovers that Fish Farm Inc. has violated an EPA regulation. If no settlement is reached, the EPA can

A) issue a formal complaint.
B) do nothing.
C) take the matter to the U.S. Supreme Court.
D) immediately impose sanctions.