An Economist Would Be More Likely to Argue for Reducing

question 43

Multiple Choice

An economist would be more likely to argue for reducing inflation if she thought that

• A)the central bank lacked credibility and if bonds were usually not indexed for inflation.
• B)the central bank lacked credibility and if bonds were usually indexed for inflation.
• C)the central bank had credibility and if bonds were usually not indexed for inflation.
• D)the central bank had credibility and if bonds were usually indexed for inflation.

---

Definitions:

Referent Power

A form of influence that one individual has over another based on the strength of their relationship or the charisma and likability of the person who holds power.

Coercive Power

The ability of a person or group to enforce compliance through threats or punishment.

Exchange Orientation

A perspective in relationships focusing on the balance of rewards and costs between the parties involved, often in the context of social or work-related interactions.

Expert Power

The influence one possesses as a result of experience, special skill, or knowledge, which others see as valuable.