With the air filter housing in place, put your multi-meter leads in the 2 and 3 pin of the X11 diagnostic socket and see if it is fluctuating rapidly. If so that is a decent indication that O2 sensor is ok.

You can also grab a signal directly from the O2 sensor connection if you really want to make sure. It should bounce from .2v to .9v and average .45v and you can check to see what happens when you lean the mixture by pulling a vacuum line or richen the mixture by pinching the fuel return line too.

If you have the duty cycle setting for % then is should be close to 50. If you can dial that in to average a 50% duty cycle and it fluctuates between like 45% and 55% then it would seem the computer is making good corrections and it needs a good O2/lambda sensor reading to do that.

The fuel mixture can be adjusted with help from this link:

BOSCH KE3-JETRONIC MIXTURE ADJUSTMENT

None of this works unless you have good components for ignition system like the coil, distributor cap, rotor, wires, plugs, sensors (temp and O2). But it should be responsive when the components are in good order and the fuel mixture is adjusted.