I) General Questions Answer each question with a brief and succinctly written paragraph (not more than 6 sentences each). 1) Why does Robert Lucas think that it is a logical fallacy to believe that economists could have predicted the financial crisis (see lucasonthedismalscience.pdf)? 2) What does Paul Krugman mean by "ketchup economics" (see howdideconomistsgetitsowrong_krugmanpdf.pdf)? 3) What does Josef Stiglitz not like about GDP as a measure of well-being (see gdpswindle_stiglitz.pdf and measuringgap_economist.pdf)? 4) Evaluate the following fiscal "stimulus" policies in terms of GDP and welfare (see how- not-to-stimulate-eco_mankiw.pdf) - you can assume that the actual payments that go from the government to Sarah are the same in each case. Also, you can abstract from any multiplier effects when answering the questions (if you do not know what multiplier effects are - never mind, this will be explained later; it is not important here): a. The government hires Sarah to dig holes in a public park and fill them up afterwards. Sarah does not like this activity, because it is physically demanding. b. The government hires Sarah to go to Daytona Beach and have fun (which she has ). c. The government pays Sarah a transfer and she goes to Daytona Beach and has fun