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

question 20

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 new classical economist be most likely to favor?

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

---

Definitions:

Negligence

A failure to behave with the level of care that someone of ordinary prudence would have exercised under the same circumstances, which results in unintended harm to another.

Liable

Legally responsible or obligated to make amends for harm caused by one's actions or negligence.

Action in Negligence

A legal claim brought against someone for harm caused by their failure to act as a careful person would under similar circumstances.

Doctrine of Strict Liability

A legal principle holding parties responsible for damages or harms caused by their actions, regardless of fault or intention.