Dick,
The JAR questions to which I refer included no mention of any particular speed nor indeed any particular stage of flight. They frequently appear in POF papers and the condition specified is usually something along the lines of "if ailerons are used to keep the wings level following a single engine failure, what will the turn indicator and ball show"?
The reason most students are unable to answer this question is because they apply a faulted line of logic. This usually goes something like...."If I use the rudder to control yaw, the sideforce will cause me to slip away from the live engine. I would normally prevent this by banking slightly towards the live engine. But the question specifies wings level, so I will still be sideslipping. If I am sideslipping the ball must indicate a sideslip".
The error of course occurred in the final stage of the argument. The ball has no means of detecting sideslip and is not intended to indicate sideslip.
Making the arbitrary judegement that the question is concerned with achieving VMC adds nothing to the process. As we all know too well, the student must answer the question asked, not the one that they wish they had been asked. For this reason I must disagree with your comment that "The whole point of the exercise is for pilots to understand how to fly at Vmc in the most critical case. When students are taking their JAR exams the whole point of the exercise is to pass those exams by answerring the questions they have been asked.
Although the method chosen in dealling with an engine failure will affect the subsequent performance of the aircraft, such matters are not directly related to the original question. It is for this reason that I have ignored them in all of my posts in this string.
I have of course no objection if discussion subsequently moves on to the performance aspects of the matter, but it is better to avoid confusing the two.