Europe’s travel lndustry is suffering as a result of sluggish economy, a stretch of bad weather as well as the chilling effects of terrorist activity that is persistent.

(A) as well as the chilling effects of terrorist activity that is persitstent
(B) and the chilling effect of terrorist activity that is persistent
(C) but persistent terrorist activity has had a chilling effect too
(D) and the chilling effects of persistent terrorist activity
(E) as well as the chilling effects of terrorist activity that persists

Oh boy, this one is a real toughie.
Let me give it a shot

(A) as well as the chilling effects of terrorist activity that is persistent
As well as is typically used when you want to indicate "in addition to".
For e.g: I have to clean the floors as well as cook the food.
I like black, white, blue, as well as green - This is incorrect. We need to use the word "AND" to describe a list of 3 things.

One of the main differences between "as well as " and "AND" is that "as well as" is considered an additive phrase, while "AND" is considered a multiplier.

Jack as well as Jill , is going to the party.

Jack and Jill are going to the party

.

(B) and the chilling effect of terrorist activity that is persistent
We will come back to this later

(C) but persistent terrorist activity has had a chilling effect too
"But" is a conjuction that is typically used to indicate contrast. There is no contrast indicated here.
I like cookies, but my sister loves chocolates.

(D) and the chilling effects of persistent terrorist activity
We will come back to this later.

(E) as well as the chilling effects of terrorist activity that persists
Same explanation as (A)

Ok, so we have a tiebreaker situation here - (B) and (D)

(B)and the chilling effect of terrorist activity that is persistent

Let's take a closer look at the meaning.
The term "that" here is used as a modifier that modifiers terrorist activity.
What does the term chilling effect refer to ? Does it refer to any terrorist activity ? Well, in this case, this term refers only to the "terrorist activity THAT IS PERSISTENT".
The meaning of the sentence changes to --> All other terrorist activities other than the ones that are persistent are considered ok

Hence (D)

One thing to note: B has singular effect, D has plural effects.

obviously down to B & D

B is clearly wrong however because B presents an illogical meaning:

B seems to imply that, in addition to the economy and bad weather, the other problem is ONLY terrorist activity that IS persistent --- illogically implying that terrorist activity that ISN'T persistent is not part of the problem

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