c. Calculate the country's GDP deflator in 2010, 2011 and Inflation in 2011 Section C. Short answer questions - Answer any 2 questions. You may apply graphs where applicable (1 point each) 1. What is inflation? What are other types of changes in the overall (general) price level that you know? Do you think that inflation is good or bad? Why? 2. Inflation is usually associated with an economy growing too fast (high economic growth). Therefore, lower growth may also signal lower inflation. But in practice, there will be some cases where the economy suffers from both slower economic growth and rising inflation. What is the name of that phenomenon? What are the key features of this phenomenon? Can you differentiate between this phenomenon, inflation and recession? If you were the government and/or central bank's policymaker, what would you do to fight against it? 3. What is the difference between an open economy and a closed-economy? List some open economies that you know? What are the factors that influence a nation's exports and imports? ---The End