{"id":92059,"date":"2025-06-01T11:13:03","date_gmt":"2025-06-01T11:13:03","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=92059"},"modified":"2025-06-01T11:13:03","modified_gmt":"2025-06-01T11:13:03","slug":"consider-the-following-statements-statement-i-in-the-post-pandemi","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-statement-i-in-the-post-pandemi\/","title":{"rendered":"Consider the following statements :\n  Statement-I: In the post-pandemi"},"content":{"rendered":"<p>Consider the following statements :<\/p>\n<ul>\n<li>Statement-I: In the post-pandemic recent past, many Central Banks worldwide had carried out interest rate hikes.<\/li>\n<li>Statement-II: Central Banks generally assume that they have the ability to counteract the rising consumer prices via monetary policy means.<\/li>\n<\/ul>\n<p>Which one of the following is correct in respect of the above statements?<\/p>\n<p>[amp_mcq option1=&#8221;Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-1&#8243; option2=&#8221;Both Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-1&#8243; option3=&#8221;Statement-I is correct but Statement-II is incorrect&#8221; option4=&#8221;Statement-I is incorrect Statement-II is correct&#8221; correct=&#8221;option1&#8243;]<\/p>\n<div class=\"psc-box-pyq-exam-year-detail\">\n<div class=\"pyq-exam\">\n<div class=\"psc-heading\">This question was previously asked in<\/div>\n<div class=\"psc-title line-ellipsis\">UPSC IAS &#8211; 2023<\/div>\n<\/div>\n<div class=\"pyq-exam-psc-buttons\"><a href=\"\/pyq\/pyq-upsc-ias-2023.pdf\" target=\"_blank\" class=\"psc-pdf-button\" rel=\"noopener\">Download PDF<\/a><a href=\"\/pyq-upsc-ias-2023\" target=\"_blank\" class=\"psc-attempt-button\" rel=\"noopener\">Attempt Online<\/a><\/div>\n<\/div>\n<section id=\"pyq-correct-answer\">\nStatement-I asserts that many Central Banks worldwide had carried out interest rate hikes in the post-pandemic recent past. This is correct. Following the initial phase of the COVID-19 pandemic which saw accommodative monetary policies, rising inflation globally prompted major central banks (like the US Federal Reserve, European Central Bank, Reserve Bank of India, etc.) to significantly increase policy interest rates starting from late 2021\/early 2022 to curb inflationary pressures.<\/p>\n<p>Statement-II states that Central Banks generally assume they have the ability to counteract rising consumer prices via monetary policy means. This is also correct. Controlling inflation and maintaining price stability is one of the primary mandates of most central banks. Monetary policy tools, such as adjusting interest rates, managing liquidity through open market operations, and setting reserve requirements, are designed specifically to influence aggregate demand and inflation. Central banks operate based on the assumption that these tools can effectively manage inflation, although the degree and speed of impact can vary.<\/p>\n<p>Statement-II provides the fundamental reason why central banks resort to actions like interest rate hikes (as mentioned in Statement-I) when faced with rising consumer prices. They raise rates because they believe this monetary policy tool can help bring down inflation. Therefore, Statement-II is the correct explanation for Statement-I.<br \/>\n<\/section>\n<section id=\"pyq-key-points\">\n&#8211; Statement-I correctly describes the global trend of central banks raising interest rates post-pandemic.<br \/>\n&#8211; Statement-II correctly describes the core belief of central banks that monetary policy can be used to combat inflation.<br \/>\n&#8211; Statement-II explains the rationale behind the action described in Statement-I (raising rates to fight rising prices).<br \/>\n<\/section>\n<section id=\"pyq-additional-information\">\nPost-pandemic inflation was driven by a complex mix of factors including supply chain disruptions, energy price shocks, and strong consumer demand supported by fiscal stimulus. Central banks primarily responded by tightening monetary policy, with interest rate hikes being the most prominent tool, based on the Phillips curve relationship (though debated) and the understanding that higher borrowing costs reduce economic activity and inflationary pressure.<br \/>\n<\/section>\n","protected":false},"excerpt":{"rendered":"<p>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? [amp_mcq &#8230; <\/p>\n<p class=\"read-more-container\"><a title=\"Consider the following statements :\n  Statement-I: In the post-pandemi\" class=\"read-more button\" href=\"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-statement-i-in-the-post-pandemi\/#more-92059\">Detailed Solution<span class=\"screen-reader-text\">Consider the following statements :<br \/>\n  Statement-I: In the post-pandemi<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1092],"tags":[1105,1120,1190],"class_list":["post-92059","post","type-post","status-publish","format-standard","hentry","category-upsc-ias","tag-1105","tag-economic-development","tag-money-banking","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Consider the following statements :  Statement-I: In the post-pandemi<\/title>\n<meta name=\"description\" content=\"Statement-I asserts that many Central Banks worldwide had carried out interest rate hikes in the post-pandemic recent past. This is correct. Following the initial phase of the COVID-19 pandemic which saw accommodative monetary policies, rising inflation globally prompted major central banks (like the US Federal Reserve, European Central Bank, Reserve Bank of India, etc.) to significantly increase policy interest rates starting from late 2021\/early 2022 to curb inflationary pressures. Statement-II states that Central Banks generally assume they have the ability to counteract rising consumer prices via monetary policy means. This is also correct. Controlling inflation and maintaining price stability is one of the primary mandates of most central banks. Monetary policy tools, such as adjusting interest rates, managing liquidity through open market operations, and setting reserve requirements, are designed specifically to influence aggregate demand and inflation. Central banks operate based on the assumption that these tools can effectively manage inflation, although the degree and speed of impact can vary. Statement-II provides the fundamental reason why central banks resort to actions like interest rate hikes (as mentioned in Statement-I) when faced with rising consumer prices. They raise rates because they believe this monetary policy tool can help bring down inflation. Therefore, Statement-II is the correct explanation for Statement-I. - Statement-I correctly describes the global trend of central banks raising interest rates post-pandemic. - Statement-II correctly describes the core belief of central banks that monetary policy can be used to combat inflation. - Statement-II explains the rationale behind the action described in Statement-I (raising rates to fight rising prices).\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-statement-i-in-the-post-pandemi\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Consider the following statements :  Statement-I: In the post-pandemi\" \/>\n<meta property=\"og:description\" content=\"Statement-I asserts that many Central Banks worldwide had carried out interest rate hikes in the post-pandemic recent past. This is correct. Following the initial phase of the COVID-19 pandemic which saw accommodative monetary policies, rising inflation globally prompted major central banks (like the US Federal Reserve, European Central Bank, Reserve Bank of India, etc.) to significantly increase policy interest rates starting from late 2021\/early 2022 to curb inflationary pressures. Statement-II states that Central Banks generally assume they have the ability to counteract rising consumer prices via monetary policy means. This is also correct. Controlling inflation and maintaining price stability is one of the primary mandates of most central banks. Monetary policy tools, such as adjusting interest rates, managing liquidity through open market operations, and setting reserve requirements, are designed specifically to influence aggregate demand and inflation. Central banks operate based on the assumption that these tools can effectively manage inflation, although the degree and speed of impact can vary. Statement-II provides the fundamental reason why central banks resort to actions like interest rate hikes (as mentioned in Statement-I) when faced with rising consumer prices. They raise rates because they believe this monetary policy tool can help bring down inflation. Therefore, Statement-II is the correct explanation for Statement-I. - Statement-I correctly describes the global trend of central banks raising interest rates post-pandemic. - Statement-II correctly describes the core belief of central banks that monetary policy can be used to combat inflation. - Statement-II explains the rationale behind the action described in Statement-I (raising rates to fight rising prices).\" \/>\n<meta property=\"og:url\" content=\"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-statement-i-in-the-post-pandemi\/\" \/>\n<meta property=\"og:site_name\" content=\"MCQ and Quiz for Exams\" \/>\n<meta property=\"article:published_time\" content=\"2025-06-01T11:13:03+00:00\" \/>\n<meta name=\"author\" content=\"rawan239\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rawan239\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Consider the following statements :  Statement-I: In the post-pandemi","description":"Statement-I asserts that many Central Banks worldwide had carried out interest rate hikes in the post-pandemic recent past. This is correct. Following the initial phase of the COVID-19 pandemic which saw accommodative monetary policies, rising inflation globally prompted major central banks (like the US Federal Reserve, European Central Bank, Reserve Bank of India, etc.) to significantly increase policy interest rates starting from late 2021\/early 2022 to curb inflationary pressures. Statement-II states that Central Banks generally assume they have the ability to counteract rising consumer prices via monetary policy means. This is also correct. Controlling inflation and maintaining price stability is one of the primary mandates of most central banks. Monetary policy tools, such as adjusting interest rates, managing liquidity through open market operations, and setting reserve requirements, are designed specifically to influence aggregate demand and inflation. Central banks operate based on the assumption that these tools can effectively manage inflation, although the degree and speed of impact can vary. Statement-II provides the fundamental reason why central banks resort to actions like interest rate hikes (as mentioned in Statement-I) when faced with rising consumer prices. They raise rates because they believe this monetary policy tool can help bring down inflation. Therefore, Statement-II is the correct explanation for Statement-I. - Statement-I correctly describes the global trend of central banks raising interest rates post-pandemic. - Statement-II correctly describes the core belief of central banks that monetary policy can be used to combat inflation. - Statement-II explains the rationale behind the action described in Statement-I (raising rates to fight rising prices).","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-statement-i-in-the-post-pandemi\/","og_locale":"en_US","og_type":"article","og_title":"Consider the following statements :  Statement-I: In the post-pandemi","og_description":"Statement-I asserts that many Central Banks worldwide had carried out interest rate hikes in the post-pandemic recent past. This is correct. Following the initial phase of the COVID-19 pandemic which saw accommodative monetary policies, rising inflation globally prompted major central banks (like the US Federal Reserve, European Central Bank, Reserve Bank of India, etc.) to significantly increase policy interest rates starting from late 2021\/early 2022 to curb inflationary pressures. Statement-II states that Central Banks generally assume they have the ability to counteract rising consumer prices via monetary policy means. This is also correct. Controlling inflation and maintaining price stability is one of the primary mandates of most central banks. Monetary policy tools, such as adjusting interest rates, managing liquidity through open market operations, and setting reserve requirements, are designed specifically to influence aggregate demand and inflation. Central banks operate based on the assumption that these tools can effectively manage inflation, although the degree and speed of impact can vary. Statement-II provides the fundamental reason why central banks resort to actions like interest rate hikes (as mentioned in Statement-I) when faced with rising consumer prices. They raise rates because they believe this monetary policy tool can help bring down inflation. Therefore, Statement-II is the correct explanation for Statement-I. - Statement-I correctly describes the global trend of central banks raising interest rates post-pandemic. - Statement-II correctly describes the core belief of central banks that monetary policy can be used to combat inflation. - Statement-II explains the rationale behind the action described in Statement-I (raising rates to fight rising prices).","og_url":"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-statement-i-in-the-post-pandemi\/","og_site_name":"MCQ and Quiz for Exams","article_published_time":"2025-06-01T11:13:03+00:00","author":"rawan239","twitter_card":"summary_large_image","twitter_misc":{"Written by":"rawan239","Est. reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-statement-i-in-the-post-pandemi\/","url":"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-statement-i-in-the-post-pandemi\/","name":"Consider the following statements : Statement-I: In the post-pandemi","isPartOf":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#website"},"datePublished":"2025-06-01T11:13:03+00:00","dateModified":"2025-06-01T11:13:03+00:00","author":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209"},"description":"Statement-I asserts that many Central Banks worldwide had carried out interest rate hikes in the post-pandemic recent past. This is correct. Following the initial phase of the COVID-19 pandemic which saw accommodative monetary policies, rising inflation globally prompted major central banks (like the US Federal Reserve, European Central Bank, Reserve Bank of India, etc.) to significantly increase policy interest rates starting from late 2021\/early 2022 to curb inflationary pressures. Statement-II states that Central Banks generally assume they have the ability to counteract rising consumer prices via monetary policy means. This is also correct. Controlling inflation and maintaining price stability is one of the primary mandates of most central banks. Monetary policy tools, such as adjusting interest rates, managing liquidity through open market operations, and setting reserve requirements, are designed specifically to influence aggregate demand and inflation. Central banks operate based on the assumption that these tools can effectively manage inflation, although the degree and speed of impact can vary. Statement-II provides the fundamental reason why central banks resort to actions like interest rate hikes (as mentioned in Statement-I) when faced with rising consumer prices. They raise rates because they believe this monetary policy tool can help bring down inflation. Therefore, Statement-II is the correct explanation for Statement-I. - Statement-I correctly describes the global trend of central banks raising interest rates post-pandemic. - Statement-II correctly describes the core belief of central banks that monetary policy can be used to combat inflation. - Statement-II explains the rationale behind the action described in Statement-I (raising rates to fight rising prices).","breadcrumb":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-statement-i-in-the-post-pandemi\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-statement-i-in-the-post-pandemi\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-statement-i-in-the-post-pandemi\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/exam.pscnotes.com\/mcq\/"},{"@type":"ListItem","position":2,"name":"UPSC IAS","item":"https:\/\/exam.pscnotes.com\/mcq\/category\/upsc-ias\/"},{"@type":"ListItem","position":3,"name":"Consider the following statements : Statement-I: In the post-pandemi"}]},{"@type":"WebSite","@id":"https:\/\/exam.pscnotes.com\/mcq\/#website","url":"https:\/\/exam.pscnotes.com\/mcq\/","name":"MCQ and Quiz for Exams","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/exam.pscnotes.com\/mcq\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209","name":"rawan239","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/761a7274f9cce048fa5b921221e7934820d74514df93ef195a9d22af0c1c9001?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/761a7274f9cce048fa5b921221e7934820d74514df93ef195a9d22af0c1c9001?s=96&d=mm&r=g","caption":"rawan239"},"sameAs":["https:\/\/exam.pscnotes.com"],"url":"https:\/\/exam.pscnotes.com\/mcq\/author\/rawan239\/"}]}},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/92059","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/comments?post=92059"}],"version-history":[{"count":0,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/92059\/revisions"}],"wp:attachment":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/media?parent=92059"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/categories?post=92059"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/tags?post=92059"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}