Question

A common economic principle is that when incomes rise consumption also rises ceteris paribus. including ceteris paribus in this statement allows economists to:_______.

Answer 1

Answer:

It allows economists to divide the impact of a change in income from other variables that affect consumption.

Explanation:

Ceteris paribus means "all things being equal". However, Ceteris paribus, the change in income will result in the consumer having more purchasing power and changes in the number of goods the consumer will demand. And this is relative to the consumer's choice, the purchasing power of the consumer increases due to the rise in the consumers' income through wages, grants received from the government, etc.