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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


Team Careers360 8th Jan, 2024
Answer (1)
Team Careers360 25th Jan, 2024

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.

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