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Implied Authority

A school teacher. We send these people our kids to be educated, to be taken care of. We choose humans for now, because we believe they demonstrate wisdom and teach things that robots can't...yet. That teacher has implied authority over the kids we send 'em.

Same way a CEO has implied authority over her company and any boss carries over the workers under them. It matters as a concept, because those with authority also carry responsibility and the requisite good judgment standard that comes with it.

Find other enlightening terms in Shmoop Finance Genius Bar(f)