Answer to Question #235435 in Economics for amanuel

Question

What is Ceteris Paribus Assumption? Why this assumption is important in economic analysis or formulation of an economic theory? Explain it with examples, as appropriate

Answer 1

In economics, the assumption of ceteris paribus, a Latin phrase meaning "with other things the same" or "other things being equal or held constant," is important in determining causation. It helps isolate multiple independent variables affecting a dependent variable.