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

Question

Quizplus · Accepted Answer

Ceteris paribus means holding all other factors constant. In this statement, the economist is examining the relationship between tax rates and tax revenues while holding other factors constant.

Which of the Following Statements Is the Best Example of the Term