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1. An auto company makes a car with a defective design so that the gas tank that bursts into flames in a rear-end accident. What do the Courts or Government order the auto companies to do? Circle all correct answers.(a) Order the auto company to recall all cars with the defective design.
(b) Order the auto company to stop sales of all cars containing the design defect.
(c) Correct the design defect.
(d) Pay damages to victims who suffered injuries as a result of the design defect.
2. A drug company makes a drug containing a chemical that causes pregnant mothers to give birth to babies with severe birth defects. What do the Courts or Government order the drug company to do? Circle all correct answers.
(a) Order the drug company to recall all drugs containing the chemical.
(b) Order the drug company to stop sales of all drugs containing the chemical.
(c) Undergo more stringent testing of drugs in the future before marketing them.
(d) Pay damages to victims who suffered injuries as a result of using the drug.
3. A group of financial companies mismanage the economy and commit fraud by over-issuing credit, manipulating interest rates, and selling unsafe financial instruments in an unstable monetary system while other financial companies rate the financial instruments as safe, resulting in curtailment of credit and a financial crisis that severely damages the U.S. housing market, economy, and world economies. What do the Courts or Government do? Circle all correct answers.
(a) Nothing to make the companies recall unsafe financial instruments.
(b) Nothing to make the companies stop sale of unsafe financial instruments.
(c) Nothing to ban the unsafe financial instruments and nothing to make the companies re-design them or even test-market similar instruments in the future.
(d) Nothing to make the companies stop manipulating interest rates.
(e) Give the financial companies a direct bailout of $700,000,000,000.00 dollars.
(f) Let the financial companies exchange toxic assets for U.S. Treasury bonds.
(g) Give the financial companies freedom from oversight or judicial review with respect to $1,800,000,000,000.00 worth of funds provided to them under other programs.
(h) Nothing to require the financial companies to resume lending.
(i) Nothing to make the financial companies pay damages to victims who suffered financial losses as a result of the crisis.
(j) They commit to take money in taxes from victims who suffered losses as a result of the financial crisis to pay for (e), (f), and (g).
(k) Nothing to prevent the companies from over-issuing credit in the future after the current crisis and crashing the economy again.
4. Who has the most power in the U.S.?
(a) The auto companies
(b) The drug companies
(c) The Courts and Government
(d) The President of the U.S.
(d) Owners of the largest financial companies
(e) The public
