Question

if an economist finds that when consumer incomes increase, consumers buy more cars, ceteris paribus, then the economist is assuming
a. all other things remain constant.
b. the price of gas must be decreasing.
c. the price of cars must be decreasing.
d. the interest rate on car loans must be decreasing.

Explanation:

The phrase "ceteris paribus" is a key term in economics that directly translates to "all other things remaining constant". The economist uses this term to isolate the relationship between consumer income and car purchases, meaning all other factors that could affect car buying (like gas prices, car prices, loan rates) are held unchanged.

Answer:

a. all other things remain constant.