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Rickooreo
egmat ExpertsGlobal5 EMPOWERgmatVerbal

In this question, there is colon after economy, so after colon, something that describes the word (noun) before it

Doubt 1 : Is it necessary that it has to be economy or since it is prepositional phrase i.e "in the economy", it can also modify noun phrase key rates in the economy or even key rates

Doubt 2 : Assuming it has to modify key rates in the economy,
Option A and D starts with not only, this is not what modifies rate and hence should be eliminated, is this approach correct??

Hello Rickooreo,

We hope this finds you well.

To answer your query, the use of a colon does not indicate that what follows must modify the preceding noun; rather, the colon is used to introduce a list, a definition/explanation, or an answer/solution, and if the colon joins two independent clauses, the second clause must explain the first in some way.

In this case, the second clause explains why the prime lending rate is a key rate in the economy.

We hope this helps.
All the best!
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