Ceteris paribus is a Latin phrase used by economist and it means "all else equal." This concept is important in both economics and finance, as it is nearly impossible to isolate a range of different variables in the real world. When using ceteris paribus in economics, it is often safe to assume that all other variables, except those under immediate consideration, are held constant and nothing interferes with the subject at hand. It is used in economics to rule out the possibility of other factors changing, which may have an impact on the outcome or decision-making process of individuals.
Explanation: Ceteris paribus is the commonly used Latin phrase used by the economist meaning 'all else equal.' The concept of ceteris paribus is important in economics because in the real world, it is usually hard to isolate all the different variables that may influence or change the outcome of what you are studying.
