1. Assume you are either (a) an ambulance driver, (b) a teacher or (c) a doctor. Make out a case why you should be paid more than the norm allowed by a current prices and incomes policy.

2. How may a government attempt to keep the expected rate of inflation down as an incomes policy is drawing to an end?

3. Under what circumstances will indexation (a) help to reduce inflation; (b) make inflation worse?

4. In 1989 and 1990, with inflation rising and pay settlements on average several percentage points above those of the mid-1980s, the Conservative government warned of the inflationary consequences of excessive wage demands. It tried to keep pay increases down in the public sector and faced industrial action from the rail unions, from ambulance staff and from other public-sector workers. What does this tell us about the government's perceptions of the causes of inflation?