Which level of state court would reverse the decision of a lower court for procedural missteps?
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General jurisdiction court
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District court
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Intermediate appellate court
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Limited jurisdiction court
2
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Which level of state court would reverse the decision of a lower court for procedural missteps?
•
General jurisdiction court
•
District court
•
Intermediate appellate court
•
Limited jurisdiction court
2
A corporation is concerned about their exposure to criminal liability after the most recent election cycle placed a number of new legislators in Congress who campaigned against corporate corruption.
Select the strategy that would be least effective in reducing the company's criminal liability.
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It could prioritize ethical leadership when making hiring decisions for management-level positions.
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It could strengthen its code of ethics to reflect the current political mood.
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It could donate to the election campaigns of the new members of Congress to establish goodwill.
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It could encourage reporting by establishing internal protections for whistleblowers beyond what is provided by Congressional law.
3
In which scenario do the different court systems in the U.S. interact properly?
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When an employee in Colorado sues her employer for sexual harassment, the state court judge applies federal law relating to workplace harassment because it extends protections to employees beyond those provided by state law.
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An Arizona resident drove through New Mexico to visit his college roommate and is hit by a delivery truck. When the New Mexico state court hears the case, the judge only takes Arizona law into consideration, since that's where the plaintiff resides.
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A federal judge refuses to hear a negligence case that includes a state-based claim in addition to a federal one. She cites the fact that federal courts can never have jurisdiction over cases that involve state laws.
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When an employee tries to file a discrimination complaint against her employer in Maine after she loses in a Vermont state court, the Maine state court agrees to hear the case.
4
Select the true statement about primary sources of law in the U.S.
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Substantive laws are necessary to determine how procedural laws will be enforced.
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Procedural laws govern the rights and obligations of people.
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A contract between two parties is an example of private law.
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Public law governs the citizenry, but not the lawmakers themselves.
5
Knowledge of the __________ Act minimizes a business's liability exposure when making decisions related to accounting practices.
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Sarbanes-Oxley
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Truth in Lending
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Federal Trade Commission
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Civil Rights
6
A landlord sues a tenant for destruction of property. During the trial, the judge issues instructions to the jury to clarify what facts it must determine to issue a verdict.
When in the trial process does this occur?
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Following jury selection
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Before the opening statements
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After the closing arguments
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During cross-examination
7
Why do LLCs often have problems borrowing funds for business growth?
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Because an LLC can only issue stock certificates to members of the company
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Because the members of the LLC are not personally liable for the debts and loans received by the LLC
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Because the partners and directors of the LLC do not share responsibility for the debts of the LLC
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Because members of the LLC cannot legally authorize the business to create debt or to borrow money
8
The new CEO of a large coffee corporation makes fighting sexual harassment a cornerstone of the company's culture after a series of embarrassing incidents involving several of the company's managers are leaked to the media. The corporation drafts a new code of ethics with an expanded set of policies related to sexual harassment, creates a series of mandatory workshops for its workforce, and fires the managers involved in the incidents.
Consider what you have learned about the factors that impact corporate culture. What is the ethical strength of the corporation in the example?
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Strong, because the corporation must show that it has an ongoing process to discourage wrongdoing in order to avoid legal action.
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Weak, because the CEO should have cracked down on the employees who were leaking information to the media as well.
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Strong, because the CEO is setting expectations for ethical behavior and holding violators accountable.
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Weak, because this focus on matters of social justice has no place in capitalism.
9
Pharmaceutical Company Z received government approval for a medicine that lowers high blood pressure. Over time, however, the company realizes that the drug causes tremors in a small number of people who use it. In deciding how to proceed, the company identifies a range of stakeholders, including corporate shareholders, consumers, physicians, the government, and society as a whole, and comes up with several possible courses of action.
According to the Josephson's core values model for ethical decision-making, what should Company Z do next?
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Evaluate the impact of each possible course of action on each of the various stakeholders.
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Try to determine which course of action will best protect the company in the short-term.
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Evaluate which course of action will provide the greatest benefit to the corporate shareholders, to whom the company has the greatest obligation.
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Try to determine which core values are most important to the company.
10
Select the true statement about the relationship between law, ethics, and business.
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Ethical business practices and conduct have value only to the owners and managers of a business.
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Ethical business practices and conduct generate goodwill that can be measured in the monetary value of a business.
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Ethical business practices and conduct increase employee and customer satisfaction, but do not affect a business' bottom line.
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Ethical business practices and conduct are more important to the short-term success of a business than the long-term.
11
Which of the following accurately characterizes the function of the U.S. Supreme Court?
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The Court is required to hear all of the cases that are sent to it by the U.S. Circuit Courts.
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The Court selects only a small number of cases to hear on an annual basis.
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The Court only hears cases sent to it by the District Courts.
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In some years, the Court does not hear any cases whatsoever.
12
What is the purpose of the Bill of Rights in the U.S. Constitution?
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To create and establish a basic foundation of individual liberties
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To establish a division of power between the branches of government
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To clearly organize the branches of government
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To define the relationship between the states
13
Select the true statement about statutory law.
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Statutes at the state level are binding on all states.
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Statutes are formed by democratically elected legislative bodies, subject to a system of checks and balances.
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At the federal level, the President has no power whatsoever over the creation of statutory law.
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Congress may enact statutory law in any area it so chooses.
14
ABC Corporation is one of the largest energy companies in the United States, with over $50 million in publicly traded shares. The corporation's unusual accounting practices have disguised the fact that the company has accumulated significant losses over the past five years, making it appear far more profitable than it is. The CEO of ABC Corporation has decided to continue misleading investors by hiding its mounting debt in order to support the company's current market valuation.
How would a deontologist evaluate this decision?
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ABC Corporation is acting unethically because the results of its dishonesty are likely to be negative for its employees, for its shareholders, and for society as a whole.
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ABC Corporation is acting unethically because it is not striving for truthfulness or high-mindedness.
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ABC Corporation is acting unethically because it sees the investors' interests as unequal to the interests of the CEO and the corporation.
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ABC Corporation is acting unethically because it has certain rights as a corporation, and therefore has a corresponding duty to consider the public good.
15
Which of the following is an example of a limited partnership?
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Anthony decides to turn his woodworking hobby into a business and is so successful that he soon employs ten people to help him manage the daily demands of his business. Anthony remains exclusively responsible for all of the company's decisions and for all of its debts.
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Liam's father invites Liam to help him run the family HVAC business. They sign an agreement in which they agree to share all of the business' profits and losses.
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Bethany and four of her friends open an interior design business when they graduate from college. Only Bethany meets directly with clients and opens new contracts, but all of the friends are fully liable for the contracts that Bethany signs.
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Maria agrees to invest some of her college savings in her sister's natural skin care company, but she doesn't want to risk losing more than she invested. Maria and her sister sign a partnership agreement that protects Maria from further accountability.
16
Which of the following is true of corporations and their shareholders?
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The number of shareholders is limited to the number of corporate officers.
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A corporation cannot have a single shareholder.
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A corporation can have as many shares as it wishes to sell.
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State law determines how many shares a corporation can have.
17
The CEO of a multinational retail corporation has decided to raise the minimum wage for its U.S. employees to three times the current federal minimum wage. The CEO explains that the company needs to provide its employees a living wage, regardless of what the law requires.
According to Milton Friedman, did the corporation fulfill its duty?
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No, because the wage hike will drastically increase the corporation's liabilities and likely harm its stock price.
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No, because the CEO's salary is still hundreds of times what the corporation's employees will be paid.
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Yes, because employees will now be able to afford to purchase more of the company's products.
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Yes, because the corporation is going beyond what the government requires it to do, in order to advance the public good.
18
Mediation is a __________ form of alternative dispute resolution.
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voluntary, binding
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sometimes involuntary, binding
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sometimes involuntary, non-binding
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voluntary, non-binding
19
Alongside the states, the federal government increasingly governs which area of law?
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Property law
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Domestic matters
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Environmental law
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Contract law
20
Which of the following is a consideration when choosing a form of business organization?
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The degree of competition faced by the business
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The time of year that the business was established
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The ease with which the founder of a business can transfer ownership to someone else
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The type of product manufactured by the business
21
Select the example where the court has established personal jurisdiction over the defendant.
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Frank, an accountant, is suing a client for unpaid bills. The client is located in Mississippi, and Frank lives and works in Virginia. Frank initiates his lawsuit in his home state, because he knows many of the state judges.
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Aisha, a resident of New York, is visited by a process officer at her workplace in New York City and delivered a summons to appear in court in Maryland. The lawsuit against her relates to property damage that occurred in a home she rented in New Jersey, which is owned by a woman from Maryland.
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Drew is being sued by a man who claims that Drew committed slander by speaking ill of him. Drew lives in Oregon, but the man is from Texas. Drew has received a summons ordering him to appear in court in Texas to respond to the complaint.
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Miguel is being sued by an acquaintance of his over unpaid debts. Both Miguel and the plaintiff are residents of Colorado. Miguel has not been personally visited by a process server with a summons to appear in court, but he did receive one in the mail at his home.
22
Select the case that is under the subject matter jurisdiction of a state court.
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A suit between two states
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A dispute over a copyright
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A paternity suit
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A case involving navigation in Puget Sound
23
The theory of legal realism holds that __________.
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law should always be applied exactly as written
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a judge's personal perspective has no bearing on how law is applied
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law should be interpreted based on social and economics considerations
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law has nothing to do with the exercise of power
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