CPython optimizes code by pre-compiling to cacheable bytecode (.pyc files), performing basic constant calculations before program startup, dynamically adjusting instructions to data types on the fly, and reusing basic objects in memory instead of recreating them.

This is a very ambiguous question. Its difficulty depends on the position you're interviewing for.

For juniors or middles, this question is purely practical: you'd better know how Python optimizes itself to avoid shooting yourself in the foot. Simply put, to avoid deleting .pyc files, thinking they're some weird, unnecessary files.

For seniors, this question is intended to elicit a deeper understanding of the language. This is a completely impractical question, asked for only one reason - none at all. This knowledge won't be of any use to a senior.