Use the Figure Below to Answer the Following Question(s)

question 88

Multiple Choice

Use the figure below to answer the following question(s) .
Figure 12-1
-Refer to Figure 12-1. If the output of the economy is Y₁, which of the following would a Keynesian economist be most likely to favor?

• A)a reduction in government expenditures
• B)an increase in government expenditures
• C)an increase in taxes
• D)continuation of the current tax and expenditure policies

---

Definitions:

Alpha

A measure of the active return on an investment, gauging how much a portfolio or fund outperforms or underperforms its benchmark index.

Hedge Fund

An investment fund that employs various strategies to produce high returns, including leverage, short-selling, and derivatives, accessible typically to wealthy investors.

Incentive Bonus

A form of additional compensation paid to an employee as a reward for achieving certain goals or exceptional performance.

Gross Return

The total return on an investment before any deductions for fees or expenses.