I am not sure I understand "what remains is the product $f(v)g(v)$" means. Is it intensity absorbed by the object as a function of frequency?
Shouldn't g(v) be 1 - absorbtion function in order to calculate how much light is reflected?
Yes, you're both absolutely right---this is the "bug" I mentioned in class. Everything (including the picture on the bottom) makes sense if you think of g as the percent reflected, rather than the percent absorbed. (Of course, these two quantities are complementary, as pointed out by @shhhh.)