Test Item File- Practice Test Bank - The Legal Environment of Business Text and Cases,Cross,11e

True / False


1. In the United States, the law consists of written laws and court decisions.
a. True

b. False

ANSWER: True



2. The legal rules that control a business’s actions reflect past and current thinking about
how similar businesses should and should not act.
a. True

b. False

ANSWER: True



3. Because laws may change, the ability to analyze and evaluate the legal ramifications of
situations as they arise is not a lasting skill.
a. True

b. False

ANSWER: False



4. The study of business law does not involve an ethical dimension.
a. True

b. False

ANSWER: False



5. Compartmentalizing the law into discrete topics indicates that each business
transaction is subject to only one specific area of the law.
a. True

b. False

,ANSWER: False



6. A constitution is a primary source of law.
a. True

b. False

ANSWER: True



7. A statute is a secondary source of law.
a. True

b. False

ANSWER: False



8. A secondary source of law establishes the law on a particular issue.
a. True

b. False

ANSWER: False



9. Courts often refer to secondary sources of law for guidance in interpreting and
applying a primary source of law.
a. True

b. False

ANSWER: True



10. Even if it conflicts with the U.S. Constitution, a state constitution is supreme within
that states’ borders.
a. True

b. False

ANSWER: False

,11. The U.S. Constitution is the basis of all law in the United States.
a. True

b. False

ANSWER: True



12. Only if a state legislature adopts a uniform law does that law become part of the
statutory law of that state.
a. True

b. False

ANSWER: True



13. A citation is a regulation enacted by a city or county legislative body.
a. True

b. False

ANSWER: False



14. A local ordinance commonly has to do with a matter concerning only a local
governing unit.
a. True

b. False

ANSWER: True



15. A federal statute applies only to those states that agree to apply it within their borders.
a. True

b. False

ANSWER: False

, 16. Congress or a state legislature establishes an administrative agency to perform a
specific function.
a. True

b. False

ANSWER: True



17. Independent regulatory agencies are not subject to the authority of the president.
a. True

b. False

ANSWER: False



18. Rules issued by administrative agencies affect almost every aspect of a business’s
operations.
a. True

b. False

ANSWER: True



19. Federal agency regulations do not take precedence over conflicting state regulations.
a. True

b. False

ANSWER: False



20. Administrative law plays a relatively insignificant role in the regulatory environment
of business.
a. True

b. False

ANSWER: False