NextMockSearch exams, e.g. SSC CGL, UPPSC, Lekhpal
हिंदी
UPSC PYQPrelims 2023

Civil Services Examination · Question 22

Consider 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. Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I
  2. Both Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-I
  3. Statement-I is correct but Statement-II is incorrect
  4. Statement-I is incorrect but Statement-II is correct
Show answer & explanation

Answer: (A) Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I

Explanation

Central banks raised rates in 2022–23 because they believe monetary tightening can curb inflation.