Ceteris paribus and Percentage point: Difference between pages

Revision as of 16:17, 9 August 2016

A percentage point is 1%, or 100 basis points.

An increase of 3%, say from 2% to 5%, is an increase of three percentage points, or 300 basis points.

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-An assumption in economic analysis that other variables remain unchanged.
+A percentage point is 1%, or 100 basis points.
-For example, looking at the relationship between demand and price, we assume for analysis purposes that all other variables are held constant.
+An increase of 3%, say from 2% to 5%, is an increase of three percentage points, or 300 basis points.
-Making the ''ceteris paribus'' assumption in error is one of the most common sources of error in forecasting and financial models.
 == See also ==
-* [[Demand]]
+* [[Basis point]]
-* [[Financial model]]