Inferring the relationship between inflation and budgetary policies

Statement 1 directly matches the author's argument that "Without the fiscal backup, monetary policy eventually loses traction" , meaning central banks cannot independently suppress inflation if budgetary expansions act against them.

Statement 2 generalizes this dynamic correctly: the structural success or real outcome of monetary policies (like moving interest rates) is deeply tied to the accompanying fiscal spending choices executed by governments[cite: 1009, 1010]. Both inferences map directly onto the text's core premises.

Answer: (c).