The principle of 'manage by exception' in PRINCE2 involves setting tolerances for each project objective to establish clear limits of delegated authority. This allows for efficient use of management time and enables project managers to make decisions within the tolerance limits, while escalating issues that go beyond these limits. References: PRINCE2 Foundation Handbook, Manage by Exception section.

In PRINCE2, the term 'project team' encompasses all individuals who are allocated time and responsibilities on the project, covering both the project management team and the wider team members who work on the project's tasks. This terminology includes everyone contributing to the project's delivery.References: = PRINCE2 7 Foundation Training Manual and official PRINCE2 website documentation

In PRINCE2, customer's quality expectations (CQEs) are a high-level statement of what the customer expects from the project and are often expressed in broad terms. They are not necessarily measurable on their own but provide a sense of general quality requirements. In contrast, acceptance criteria are specific and precise; they form the list of conditions that a project product must meet to be accepted by key stakeholders.
Therefore, statement 1 is false, and statement 2 correctly describes the customer's quality expectations.References: PRINCE2 7 Foundation handbook and official documents.

Among the six aspects of project performance that need to be managed according to PRINCE2, 'Progress' is a key component. The other aspects include costs, timescales, quality, scope, risk, and benefits. Managing progress involves monitoring and controlling how far along the project is in achieving its objectives and delivering its products. References: PRINCE2 Foundation official documentation and study materials.

he PRINCE2 principle of "Focus on products" helps to ensure that all changes to the outputs are agreed upon. This principle emphasizes defining and delivering products that meet specific requirements, ensuring that changes are controlled and agreed upon through the proper product descriptions and project management processes. It helps manage scope and quality by focusing on product delivery requirements.References:
PRINCE2 Foundation Manual