1. A nation can export less than the sum of imports, net factor income (such as interest and dividends) and net transfer payments (such as foreign aid) and run a government surplus of equal proportion to GDP, while the private domestic sector is spending less than they are earning.
Answer: False
2. For workers to regain a larger share of national income, nominal wages have to grow faster than inflation - that is, the real wage has to rise.
Answer: False
3. Say, we form the view that over the next year: (a) the average working week will be constant in hours; (b) real GDP growth rate will be 3 per cent; (c) output per unit of labour input (persons) will grow at 1.5 per cent; and (d) the labour force will maintain a growth rate of 1.5 per cent per annum. We would project that the unemployment rate: