Correct the following statements:Statement-I: In the post-pandemic recent past, many Central Banks worldwide had carried out interest rate hikes.Statement-II: Central Banks generally assume that they have the ability to counteract the rising consumer prices via monetary policy means.Which one of the following is correct in respect of the above statements?

1. A

   Both Statement-I and Statement-II are correct and Statement- II is the correct explanation for Statement-I

   Both correct and II explains I. Post-COVID inflation led to a global hiking cycle because central banks treat demand-side price rises as a monetary-policy job.

2. B

   Both Statement-I and Statement-II are correct and Statement- II is not the correct explanation for Statement-I

   Both correct but II does not explain I. The hiking cycle is exactly that assumption at work.

3. C

   Statement-I is correct but Statement- II is incorrect

   I correct, II incorrect. Central banks do use rates against inflation.

4. D

   Statement-I is incorrect but Statement-II is correct

   I incorrect, II correct. The hiking cycle did happen.

Summary. Official key is (a). After the pandemic, many central banks raised policy rates. They did so because the standard model says tighter money can cool inflation. Statement-II is why Statement-I happened.