Which of the Following Statements Is the Best Example of the Term

question 254

Multiple Choice

Which of the following statements is the best example of the term ceteris paribus?

• A) An economist holds other factors constant when he examines the relationship between tax rates and tax revenues.
• B) More money should be spent on cleaning up the environment.
• C) The government budget surplus was $200 billion in 2000 because the economy was growing.
• D) An increase in the budget surplus after an increase in tax rates implies that tax rate increases cause budget surpluses.
• E) When studying the effects of a budget deficit, an economist must take account of all the factors involved.

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Definitions:

Probability

The measure of the likelihood that an event will occur, expressed as a number between 0 and 1, where 0 indicates impossibility and 1 indicates certainty.

Expected Opportunity Loss

A statistical determination of potential loss due to not selecting the optimal choice among different options.

Gross Profits

The difference between revenue and the cost of goods sold before deducting overheads, payroll, taxation, and interest payments.

Probability

A measure of the likelihood that a particular event will occur, expressed as a number between 0 and 1, where 0 indicates impossibility and 1 indicates certainty.