Step 1: Understanding the Concept: 
This question tests the knowledge of how different pack animals are adapted to and used for transportation in various geographical regions. 
Step 2: Detailed Explanation: 
Let's match each animal in List-I with its corresponding region in List-II: 
    
 (A) Mules: Known for their strength and sure-footedness, mules are ideal for carrying heavy loads in rugged, steep terrain. Therefore, they are widely used in (I) Mountains.
    
 (B) Camels: Often called the "ship of the desert," camels are uniquely adapted to survive in arid conditions with little water, making them the primary mode of transport in (III) Deserts.
    
 (C) Reindeer: These animals are adapted to cold, snowy climates and are used by indigenous people in Arctic and sub-arctic regions, such as (II) Siberia, for pulling sleds.
    
 (D) Horses: While used globally, horses have been a historically significant mode of transport and work in (IV) Western Countries, and continue to be used in various capacities.
The correct matching is: A$\rightarrow$I, B$\rightarrow$III, C$\rightarrow$II, D$\rightarrow$IV. 
Step 3: Final Answer: 
Based on the matching, option (2) provides the correct combination of animals and their regions of use.