What does the term "ceteris paribus" mean when used by an economist?
A) Their conclusions are based on normative rather than positive economic analysis.
B) The causal relationship between two economic variables cannot be determined.
C) The analysis is True for the individual but not for the economy as a whole.
D) All other variables except the ones specified are assumed to be constant.

Question

Quizplus · Accepted Answer

"Ceteris paribus" means "all other things being equal" or "holding all else constant". Therefore, when an economist uses this term, they are assuming that all other variables except the ones specified in the analysis are constant, so that the effect of one factor on another can be isolated and examined.

What Does the Term "Ceteris Paribus" Mean When Used by an Economist