Final answer:
The statement is false because a claim in advertising is a verifiable factual statement about a product, regulated by the FTC, while puffery is an exaggerated, subjective statement considered to be opinion rather than fact. Claims must be true; puffery is allowed as hyperbolic promotional language under the principle of 'caveat emptor'.
Step-by-step explanation:
The statement that a claim is when a firm makes an exaggerated statement about a good or service, while puffery is when a firm makes a factual statement about a good or service, is false. In advertising and marketing, a claim refers to a factual statement about a product's capabilities that can be objectively measured and verified. The Federal Trade Commission (FTC) is responsible for ensuring that such factual claims are truthful and not misleading. On the other hand, puffery involves exaggerated or subjective statements that are not meant to be taken literally and thus are not verifiable.
These are promotional expressions that are considered opinion rather than fact, and they often emphasize the desirability of a product without making concrete assertions about its functionality. The use of puffery is generally permissible in advertising because it is understood as opinion or hyperbole, whereas factual claims that are untrue are prohibited. An important concept that consumers should always keep in mind is caveat emptor, which translates to 'let the buyer beware,' highlighting the importance of consumer vigilance in evaluating advertising claims.