Effective teachers diversify their assessment strategies.  This should include occasionally giving open-book/note assessments.  These types of  assessments offer another powerful way to assess a student's ability to apply and analyze information, as well as for a teacher to measure his/her own instructional/assessment practices (i.e. amount of memorization, level of real-world application, etc.).   Grade inflation and diminished study habits are not problematic if open-book assessments are A.) designed for the appropriate learning objectives and B.) part of a diverse and effective set of instructional and assessment strategies.