Question : The saving function is given by S = 0.3Y - 200. If disposable income is INR 1,500, what is the level of saving?
Option 1: INR 250
Option 2: INR 500
Option 3: INR 800
Option 4: INR 950
Correct Answer: INR 250
Solution : The correct answer is (A) INR 250
To find the level of saving, we can substitute the given disposable income (Y) of INR 1,500 into the saving function:
S = 0.3Y - 200
= 0.3 * INR 1,500 - 200
= INR 450 - 200
= INR 250
Therefore, the level of saving when the disposable income is INR 1,500 is INR 250
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