When economists use the term Ceteris paribus, they are indicating that:
a. the relationship between two economic variables cannot be determined.
b. the analysis is true for the individual but not for the economy as a whole.
c. all other variables except the ones specified are assumed to be constant.
d. their conclusions are based on normative economics rather than positive economic analysis.
Answer: c. all other variables except the ones specified are assumed to be constant.
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A stand of redwood trees is not an example of a factor of production but the harvested and processed redwood is a factor of production
Indicate whether the statement is true or false
The difference between economic profit and accountant’s definition of profit is that an economist’s total cost counts the ____ of inputs.
A. absolute value B. overheads C. opportunity cost D. gross cost
If debt-financed less productive government spending crowds out more productive private investment, future generations will bear
A. All of the burden of the debt due to higher taxes. B. A portion of the burden of the debt relative to the population size. C. Some of the burden of the debt due to lower productive capacity. D. Zero burden as a result of the debt.
The credibility theory of the EMS implies in effect that the political costs of violating international exchange rate agreements
A) cannot restrain governments from depreciating their currency. B) can restrain governments from depreciating their currency. C) cannot restrain governments from depreciating their currency in the short run. D) cannot restrain governments from depreciating their currency in the long run. E) can control the political policies of member nations.