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Here is a detailed explanation to this question-
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In the United States, a larger percentage of the defense budget is spent on development of an anti-missile shield than is spent on nuclear missile technology in the People’s Democratic Republic of North Korea.
(A) In the United States, a larger percentage of the defense budget is spent on development of an anti-missile shield than is spent on nuclear missile technology in the People’s Democratic Republic of North Korea.
(B) In the United States they spend a larger percentage of the defense budget on development of an anti-missile shield than the People’s Democratic Republic of North Korea does on nuclear missile technology.
(C) A larger percentage of the United States’ defense budget is spent on development of an anti-missile shield than the People’s Democratic Republic of North Korea spends on nuclear missile technology.
(D) The United States spends a larger percentage of its defense budget developing its anti-missile shield than the People’s Democratic Republic of North Korea spending on nuclear missile technology.
(E) The United States spends a larger percentage of its defense budget on developing its anti-missile shield than the People’s Democratic Republic of North Korea does on nuclear missile technology.
Choice A: This answer choice modifies the second clause with the phrase "In the United States", incorrectly implying that the act of spending money on nuclear missile technology in the People’s Democratic Republic of North Korea is also happening in the United States. Thus, this answer choice is incorrect.
Choice B: This answer choice suffers from pronoun ambiguity; there is no clear antecedent for the pronoun "they". Thus, this answer choice is incorrect.
Choice C: This answer choice incorrectly compares "percentage...spent" to North Korea's action of spending money on its nuclear missile technology. Thus, this answer choice is incorrect.
Choice D: This answer choice fails to maintain parallelism between the verbs "spends" and "spending". Thus, this answer choice is incorrect.
Choice E: This answer choice correctly compares the action undertaken by the United States to the action undertaken by North Korea, preserves the intended meaning of the sentence, and maintains parallelism and proper pronoun use. Thus, this answer choice is correct.
Hence, E is the best answer choice.To understand the concept of "Avoiding Pronoun Ambiguity on GMAT", you may want to watch the following video (~1 minute):
All the best!
Experts' Global Team