In establishing economic policy, policymakers usually rely on preexist

Answers are in bold.

1. Which one of the following best describes the organization of the passage?
(A) A predicament is outlined, factors leading up to the predicament are scrutinized, and an example of the predicament is offered.
(B) A phenomenon is described, an implication of the phenomenon is suggested, and an illustration of that implication is offered.
(C) A problem is presented, an example of the problem is provided, and a course of action addressing the problem is suggested.
(D) A generalization is made, evidence supporting the generalization is presented, and a particular instance illustrating the generalization is evaluated.
(E) A particular worldview is explained, its shortcomings are discussed, and an evaluation of these shortcomings is presented.

Explanation of question 1
These are tricky, since you need to go through each choice to make sense if that is the correct arrangement.
A - Predicament - dominant theory loosing credibility?
factors leading to predicament - not really discussed;
example - not for the predicament itself, i.e. there are no examples offered for dominant theory loosing credibility.
This is not the answer.

B - phenomenon - policymakers adapt dominant theory
implication of phenomenon - adversely affect economic development of developing nations
illustration of implication - when IMF forced many countries to follow neoclassical policies, that turned out to be disastrous for these countries.
This choice looks good.

C - problem - dominant theory loosing credibility
example of problem - none given
course of action - also not given

D - there is no generalisation made, so we will skip this choice.

E - this is also a close choice.
worldview - There is definitely a view, the view of adoption of dominant development theory, but I do not think this is a WORLD view. It is a view of the author.
worldview's shotcomings - shortcomings are it is loosing credibility, as a result of FLAWS. These flaws are the shortcomings. But it is not discussed what flaws in particular.
evaluation of shortcomings - Definitely not evaluated the flaws.
This is not the answer.
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2. Which one of the following best describes the relationship of the second paragraph to the passage as a whole?
(A) It predicts a future development.
(B) It qualifies an assertion made earlier by the author.
(C) It introduces a hypothesis that the author later expands upon.
(D) It clarifies a claim made in the preceding paragraph.
(E) It presents a counterexample to a general thesis.

Explanation of question 2
We do not have para demarcation in this passage, possibly because of formatting errors. but we kind of know what the two sides of the passage are -a)there is a problem for countries with established economy, and b) what happens in developing (not established economy) nations.
So we can actually demarcate the two paragraphs, based on what the author intends to mean.

In establishing economic policy, policymakers
usually rely on preexisting models of development and
tend to adopt the dominant development theory of their
era. With dominant theories quickly losing credibility
(5) as a result of flaws exposed through their application,
alternative theories often take hold. Such intellectual
shifts are welcome in academia, but can adversely affect
the economic development of developing nations.

Unlike most first-world countries whose economic
(10) policies are subject to scrutiny by democratically-elected
government officials and tend to change gradually,
developing nations can be easily compelled to accept
structural adjustment policies by international regimes
such as the World Trade Organization (WTO) and the
(15) International Monetary Fund (IMF). In the early 1980’s,
for instance, the IMF forced many developing countries
to accept neoclassical policies in return for funding. This
quickly devalued the states’ currency, cut government
spending, raised prices, and phrased out agricultural
(20) subsidies. By compelling developing countries to abolish
trade protections and participate in free trade regimes,
the IMF left those markets vulnerable to exploitation and
predation.

Now thats more like it. We are now equipped to answer this question.

A - It does predicts a future development - IMF left those markets vulnerable to exploitation and predation. But look at what the question is asking... relationship of the 2nd para with the passage as a whole. So in the context of the whole passage, predicting a future development is not the intended function of the second paragraph.
B - There was an assertion made earlier by the author. But is this qualifying that assertion? I don't think so.
C -It is more describing than introducing a new hypothesis.
D - This is our answer. Lets see what the claim was - but can adversely affect the economic development of developing nations. Ok so this was the claim. Then in the second paragraph the author say this - "the IMF left those markets vulnerable to exploitation and predation." So that is the structure of the second paragraph which clarifies the claim made in the first para.
E - this is not a counter-example. This is not countering an argument.