Which of the following statements is the best example of the term ceteris paribus?
A) An increase in the budget surplus after an increase in tax rates implies that tax rate increases cause budget surpluses.
B) The government budget surplus was $200 billion in 2000 because the economy was growing.
C) More money should be spent on cleaning up the environment.
D) When studying the effects of a budget deficit, an economist must take account of all the factors involved.
E) An economist holds other factors constant when he examines the relationship between tax rates and tax revenues.
Correct Answer:
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