Answer-Below are two statements (I) and (II). Read both statements and mark your answer based on the causal...

Logical Connection Central banks use monetary policy tools like raising benchmark interest rates to curb persistent inflation. When inflation stays above the target tolerance limit, it creates pressure on the central bank to tighten monetary policy to reduce liquidity and cool down price pressures. Temporal Sequence Statement II describes a condition occurring over three consecutive quarters prior to the monetary policy action. This persistent high inflation directly prompted the Central Bank to take corrective action, which resulted in the rate hike described in Statement I. Therefore, persistent high inflation Statement II acted as the direct cause, and the Central Banks subsequent decision to raise policy rates Statement I is its natural effect.

Question

Below are two statements (

I and (I
I . Read both statements and mark your answer based on the causal relationship between them. Statement (
I : The Central Bank unexpectedly raised its benchmark policy interest rate by 50 basis points. Statement (I
I : Consumer price index (CP
I inflation in the country remained consistently above the bank's upper tolerance threshold for three consecutive quarters.