Question

Kathy knows from her economics class that to isolate the effects of a particular phenomenon, all other things must remain the same. In Latin, this is referred to as:_______ .

Answer 1

Answer:

Ceteris paribus

Explanation:

Ceteris paribus is a Latin term that means other things being equal. It also means all other things being constant or all other things being unchanged.

In economics when there is need to isolate the effect of an action it is important to keep other variables constant, so that observed results are attributed only to the variable under study.

For example in price elasticity of demand when price increases the demand is observed to reduce. This statement is based on the assumption that all other variables remain constant.

Other variables that can affect the statement above are interest rate, inflation, and income level.