If the inflation rate was 5% last year, rational expectations would predict that inflation next year will be: a. 2% . b. 5% c. 3% o d. Cannot be determined from the information Clear my choice Countries O and C are identical in all aspect, except that O is an open economy with flexible exchange rate, while C is a closed economy. The government in both countries decide to increase spending. Assume that prices are fixed. How does the resulting change in GDP differs? on a. GDP increases in C but decreases in O .b. GDP increases in both countries, by the same amount . c. GDP increases in both countries, but more so in C o d. GDP increases in both countries, but more so in O Clear my choice