Principles of Macroeconomics / Unit 1 MAC 0011 short lesson, about 20 seconds
Theories, Models and Ceteris Paribus
Captions available
The idea
A theory is a simplified representation of how variables interact. Ceteris paribus means all other things unchanged, the assumption that isolates one effect from the rest.
In practice
A map omits most of the landscape and is more useful for it.
Where people slip
In the world everything changes at once, so the assumption is never literally met, and every economic test must work around it.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
Builds on
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