Consider the following statements regarding imported inflation:
1. Imported inflation occurs when domestic prices increase due to the rise in prices of imported commodities and raw materials.
2. It is primarily caused by a country's strong export performance leading to an appreciation of its currency.
Which of the statements given above is/are true?
1
Only 1
2
Only 2
3
Both 1 and 2
4
Neither 1 nor 2