The graph shows a saving function. Below an income of ₹160 crore, households 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.

Question 44

MediumOriginal question

The graph shows a saving function. Below an income of ₹160 crore, households

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.

save part of their incomeCorrect answerYour answerneither save nor consumeCorrect answerYour answersave all their incomeCorrect answerYour answerdissave: they consume more than their incomeCorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer D

Correct answer: D

The saving line is below the income axis to the left of B, so S is negative there.

Concept: Dissaving
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsThe saving function and break-even

Practise this chapter →

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

Practise this chapter →

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

The graph shows a saving function.

Question 44

Explanation