The graph shows a saving function. What is saving when income is zero? A saving line S = −40 + 0.25Y that starts at −₹40 crore below the income axis, crosses it at B (income ₹160 crore, saving zero) and reaches ₹60 crore of saving at K, where income is ₹400 crore.

The graph shows a saving function. — CUET Economics practice

The graph shows a saving function.

MediumOriginal question

The graph shows a saving function. What is saving when income is zero?

₹0Correct answerYour answer₹−40 croreCorrect answerYour answer₹40 croreCorrect answerYour answer₹60 croreCorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer B

Correct answer: B

The saving line starts at −₹40 crore on the vertical axis.
At zero income, households dissave to pay for autonomous consumption of ₹40 crore.

Ten questions from Aggregate Demand, Consumption & Saving, at your own pace.

Ten questions from Aggregate Demand, Consumption & Saving, at your own pace.