PRESENTATION OUTLINE
Latin phrase that translates approximately to "holding other things constant" and is usually rendered in English as "all other things being equal".
For example, when discussing the laws of supply and demand, one could say that if demand for a given product outweighs supply, ceteris paribus, prices will rise.
An increase in interest rates will ‘ceteris paribus’ cause demand for loans to fall. Higher interest rates increase the cost of borrowing so there will be less demand for loans.
If the price of beef increases, ceteris paribus, people will purchase less beef. In this situation, ceteris paribus means that the possibility of other changes affecting the sales of beef will not be considered.
For example, the United States government could add so many taxes onto the price of gas at the pump that the price consumers would pay for domestic gasoline could be equal to or higher than gas obtained from oil from other countries.
If the United States drilled for oil off of its own shores, ceteris paribus, the price of gasoline in the United States would drop significantly.
