Explanation:

The interrupt register and the mask register are two important components in a computer system that are used to manage interrupts.

Interrupt Register:
The interrupt register is a hardware register that stores information about the currently occurring interrupts in the system. It typically consists of multiple bits, with each bit representing a specific interrupt source. When an interrupt occurs, the corresponding bit in the interrupt register is set to 1.

Mask Register:
The mask register is another hardware register that is used to enable/disable interrupts. It consists of multiple bits, with each bit corresponding to a specific interrupt source. If a bit in the mask register is set to 1, the corresponding interrupt is enabled, and if it is set to 0, the interrupt is disabled.

Priority Encoder:
A priority encoder is a combinational circuit that converts multiple binary inputs into a binary output based on their priority. In the context of interrupts, a priority encoder is used to determine the highest priority interrupt among the active interrupts. It assigns a unique binary code to the highest priority interrupt and ignores the lower priority interrupts.

Priority Decoder:
A priority decoder is a combinational circuit that performs the reverse operation of a priority encoder. It takes a binary input and decodes it into multiple output lines based on the priority of the input. In the context of interrupts, a priority decoder can be used to decode the interrupt number for handling the interrupt.

Process ID Encoder:
A process ID encoder is not directly related to interrupts. It is a component used in process management to uniquely identify different processes running in a computer system.

Multiplexer:
A multiplexer is a combinational circuit that selects one of many inputs and forwards it to a single output line based on the control inputs. It is commonly used in data routing and selection.

Explanation of the Correct Answer:
The correct answer is option 'B' - Priority Encoder. The output of the bits of the interrupt register and the mask register are set as inputs to the priority encoder. This arrangement allows the priority encoder to determine the highest priority interrupt among the active interrupts by considering both the interrupt register and the mask register. The priority encoder will assign a unique binary code to the highest priority interrupt and ignore the lower priority interrupts. This information can then be used by the system to handle the interrupt efficiently.

The priority encoder is a suitable choice for this scenario because it can handle multiple inputs and prioritize them based on their importance. It simplifies the process of identifying the highest priority interrupt, which is crucial in interrupt handling and system performance.