Question : The saving function is given by S = 0.4Y - 300. If disposable income is INR 2,500, what is the level of saving?
Option 1: INR 400
Option 2: INR 500
Option 3: INR 700
Option 4: INR 1,000
Correct Answer: INR 700
Solution : The correct answer is (c) INR 700
To find the level of saving, we can substitute the given value of disposable income (Y) into the saving function.
Given: S = 0.4Y - 300
Disposable income (Y) = INR 2,500
Substituting the value of Y into the saving function, we get:
S = 0.4 * 2500 - 300
S = 1000 - 300
S = 700
Therefore, the level of saving is INR 700.
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
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 3: INR 800
Option 4: INR 950
Question : The consumption function is given by C = 500 + 0.75Y. If disposable income is INR 4,000, what is the level of consumption?
Option 1: INR 3,500
Option 2: INR 4,500
Option 3: INR 6,000
Option 4: INR 7,500
Question : The consumption function is given by C = 600 + 0.8Y. If disposable income is INR 3,000, what is the level of consumption?
Option 1: INR 1,800
Option 2: INR 3000
Option 3: INR 4,200
Option 4: INR 4,800
Question : The investment multiplier is 4. If there is an autonomous increase in investment spending of INR 500, what will be the change in equilibrium income?
Option 1: INR 500
Option 2: INR 2,000
Option 3: INR 1,000
Option 4: INR 2,500
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