Question : The saving function is given by S = 0.2Y - 100. If disposable income is INR 2,000, what is the level of saving?
Option 1: INR 300
Option 2: INR 400
Option 3: INR 500
Option 4: INR 600
Answer (1)
25th Jan, 2024
Correct Answer:
INR 300
Solution : The correct answer is (A) INR 300
To find the level of saving, we can substitute the given disposable income (Y) of INR 2,000 into the saving function:
S = 0.2Y - 100
= 0.2 * INR 2,000 - 100
= INR 400 - 100
= INR 300
Therefore, the level of saving when the disposable income is INR 2,000 is INR 300
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