1 National accounting shows us that a government surplus equals a non-government deficit. If the British government is successful in putting its budget back into surplus then the private domestic sector will become more indebted as a consequence which means that austerity amounts to swapping public for private debt.

Answer: False

2. The relentless push by neo-liberals to cut real wages growth has allowed the share of national income going to profits to expand over the last 30 years in many nations.

Answer: False

3. If the stock of aggregate demand growth outstrips the capacity of the productive sector to respond by producing extra real goods and services then inflation is inevitable.

Answer: False

4. The Australian dollar is currently appreciating strongly against many of the key currencies and this has put pressure on our international competitiveness. Export competitiveness will be restored under these conditions if local workers accept a cut in nominal wages and the rate of inflation is contained.

Answer: False

5: Premium question: The US Federal Reserve this week put out its updated projections which provide "central tendency" estimates of real GDP growth between 3.5 and 4.3 per cent in 2013. Their lowest estimate for 2013 was 3 per cent per annum. Assuming the current labour productivity growth continues (around 2 per cent per annum) and the labour force growth resumes more normal rates (around 1.4 per cent per annum) by 2013 and the average working week is constant in hours, then one consequence of the difference between the lower bound of the central tendency projections and their lowest estimate will be that the unemployment rate will fall more slowly in 2013 if the the latter projection is true.

Answer: False