Hi ajaysingh24,

Answer D includes some redundancies; by definition, a redundancy is unnecessary and is considered bad grammar.

Here are the redundant elements:

"falling underemployment rates THAT are triggered.....causing PEOPLE to cut consumer spending....layoffs that lead BACK to even lower...."

GMAT assassins aren't born, they're made,
Rich

The differences between answer choices are subtle, and many come down to MEANING rather than grammar.

"a lowering of employment rates" implies that someone intentionally lowered them. This doesn't make sense - only "falling employment rates" makes sense. Eliminate A and B.

"causing people to cut consumer spending" also doesn't make sense. People can cut back on spending, but this phrasing makes it sound like an intentional choice to cut, rather than a result of some other cause. Eliminate D.

C versus E is a difficult split (and more hair-splitting than you're likely to see on the real GMAT).

aditya8062, be careful:

the question as it stands now can never have C as an answer
"which" in C has some serious problems

This is not strictly true. A clause beginning with "which" should modify the noun directly before it... with one exception. A "which" is allowed to hop over an essential modifier (such as a prepositional phrase or a past participle) to modify the noun that comes before that. For example:
Here is the basket of apples, which is heavier than I expected.

Here, the "which" is modifying "basket," not "apples."

In C, we're hopping over then entire phrase "triggered by..." to modify "rates." Stylistically this isn't great (the GMAT would rarely allow a "which" to hop quite so far), but technically it's not grammatically incorrect.

In E, the cause-effect structure is slightly reversed. The meaning of the sentence is that falling employment rates (which cause spending drops and layoffs) cause economic recessions.

In E, by using the adverbial modifiers "causing" and "starting," it implies that the "causing and starting" are the RESULTS of the clause "a recession can result from..." rather than the CAUSE. Adverbial modifiers often show cause/effect relationships:
I tripped, falling on my face.

So, there are several reasons (besides concision, which is rarely a deciding factor) that C is the more correct answer (though not necessarily a great one).

For a more GMAT-like use of the hopping-which rule, see:
https://www.beatthegmat.com/emily-dickin ... tml#563839