I read somewhere that --

Political situations have caused an increase in gas prices --> right
Political situations have caused increasing gas prices --> wrong

Are the above examples correct? If they are, then rising rates made buying goods more expensive should be wrong and a rise in rates made buying goods more expensive goods is right?

Can someone explain if there is a strong enough reason to eliminate option E beacause of pronoun ambiguity??

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yunbao , welcome to GMAT Club.

I am not sure exactly where you read the two sentences that you list, but they are referenced in this topic, HERE, on the Manhattan Prep site.

The issue in that pair of sentences is one of meaning.
The answer to your question is given on that site, on that topic thread, in THIS POST, HERE.

If you read that thread and still have a specific question, please post it and tag me. I will be happy to try to help.
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adizephyr , belated welcome to GMAT Club.

Sidebar: The original version of the answer choices was edited. (I can tell from Tommy Wallach's explanation. Now option B does not include the pronoun THEM.)

Yes, adizephyr , the "strong enough reason" to eliminate E based on pronoun ambiguity is cemented by the absence of them in option B.

• First, in general, GMAC strongly prefers that pronouns of the same form (third person plural) refer to the same noun.
A few exceptions exist.
In the non-underlined portion, they refers to analysts
Typically, them would follow suit and refer to analysts, but that connection is absurd. Analysts are not bought on credit.

The only logical antecedent for them is durable goods.
Analyzed in isolation, it is not 100% clear whether pronoun ambiguity is "enough" to eliminate E.
If I were analyzing based on pronoun clarity alone, I would hold E until I compared it with another answer.

• Second, option B, which is grammatical and logical, does not include them, thus avoiding the pronoun issue.

If B contained a clear grammatical error or conveyed illogical or nonsensical meaning, then we could argue that the noun antecedent durable goods is the only logical candidate for them in option E

But (B) presents no such issue.

Choose B because it is grammatical, logical, and because it avoids this pronoun issue.

Hope that analysis helps.
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The sentence says "Federal Reserve had raised a key short-term interest rate against last month"-- which means the interest rate was raised once. I don't see how it implies that that rates will keep rising. How can we say "Rising interest rates" in the correct answer choice.

I had narrowed it down to C,D and E and rejected C and D because of S-V agreement error(make)

GMATNinja can you please help me with this? Thanks.

We don't know for sure that interest rates will keep rising. Notice that "rising" is just an adjective in (A) and (B), and we know that interest rates were raised AT LEAST once before (it's possible that the rates were raised several times before). Regardless of how long the rates have been rising, we can certainly say that interest rates have, in fact, been rising!

Because interest rates have been rising, analysts expect orders for durable goods to decline soon. Now it is certainly possible that the Federal Reserve lowers interest rates next month and that orders for durable goods don't change much. But the analysts' logic remains sound:

1) "rising interest rates make buying on credit more expensive"
2) Interest rates have been rising recently (for however long)
3) Therefore, we expect orders for durable goods to decline soon

Whether interest rates actually continue to rise isn't important.

I hope that helps!
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But aren't gerunds singular? Choice A makes the correct use. Please help in explaining.

egmat ,generis

'rising' describes interest rates, which is plural.
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Noting that the Federal Reserve had raised a key short-term interest rate against last month, analysts said that they expected orders for durable goods to decline soon because rising interest rates makes it more expensive to buy them on credit.

(A) rising interest rates makes it more expensive to buy them on credit
it- ambiguous. interest rates - plural , makes - singular . So, A Is out

(B) rising interest rates make buying on credit more expensive
I don't find any error . Let s keep b
(C) a rise in interest rates make it more expensive to buy on credit
it - ambiguous
(D) a rise in interest rates make buying on credit more expensive
a rise - singular , make - plural . D is out
(E) a rise in interest rates makes it more expensive for them to be bought on credit
So long. 99% of Qs which are this much long would always be wrong in Gmat. (At least as per my expectations)
it- ambiguous, who are them ? . E is out

B is our ultimate winner