For this question, it will be good to talk a little about 'noun clauses'.
A noun clause can take the place of a noun in a sentence. i.e. It can take the role of a subject or object
A
noun clause is the subject of these grammatically correct sentences:
1.
What was predicted is scary
2.
What they predicted is happening.
3.
What I predict always happens.
4.
What they predicted did happen.
5.
What they had predicted did happen.
The past perfect
'what had been predicted' in Sentence 5 is acceptable (not mandatory): because the prediction and whatever happened are both in the past, and the prediction came earlier.
The following sentences use a noun clause in an object role. Again, all are grammatically acceptable.
6. Our plans are based on
what was predicted.
7. Our plans are based on
what he predicted.
8. Our plans are based on
what he had predicted.
9. His figures are higher than
what he predicted.
10. His figures are higher than
what he had predicted.
The past perfect in Sentences 8 and 10 is allowed (for the same reason as for Sentence 5).
Now the tricky part. We can drop the 'what' in sentences 9 and 10 (but not in the earlier sentences) -- and the sentences
will still be fine.
So the following are acceptable too:
11. His figures are higher than
he predicted.
12. His figures are higher than
he had predicted.
Answer Choice D, the
correct answer to the current question, is like Sentence 10
D. . . . a billion dollars more than
[what] they had predicted.
The 'what' is implied, but not present.
Let us look at
incorrect answer choices C and E:
C. . . . a billion dollars more than
it was predicted.
E. . . . a billion dollars more than
they predicted it.
"it was predicted" and "they predicted it" are NOT noun clauses. They can be independent sentences.
Neither can take the the place of a noun in a sentence.