NandishSS wrote:Even though recent national statistics suggest a revival in business activity, some credit-market analysts maintain that the Federal Reserve Board needs to lower short-term interest rates further for stimulating the economy.

A.the Federal Reserve Board needs to lower short-term interest rates further for stimulating
B.the Federal Reserve Board needs to lower short-term interest rates further in order to stimulate
C.the need is for the Federal Reserve Board to lower short-term interest rates further for stimulating
D.there need to be a further lowering by the Federal Reserve Board of short-term interest rates for the purpose of stimulating
E.short-term interest rates need to be lowered further by the Federal Reserve Board so as to stimulate

A and C: rates further for stimulating the economy
Here, the phrase in red seems to be ADJECTIVE describing the RATES.
Question: What KIND of rates?
Answer: RATES for stimulating the economy.
Not the intended meaning.
The intention here is not to describe the rates themselves but to express WHY the rates should be LOWERED.
To express why an action should be performed, we generally use an infinitive modifier (to + VERB), as illustrated by the OA:
The Federal Reserve Board needs to lower short-term interest rates further in order TO STIMULATE the economy.
Eliminate A and C.

In D, a further lowering (singular) does not agree with need (plural).
Eliminate D.

E: so as to
On the GMAT, so as to is considered unidiomatic.
Eliminate E.
For more on this issue, check my post here:
https://www.beatthegmat.com/og-sc-questi ... 75-15.html

The correct answer is B.

The whole sentence is in "simple present" tense. So, the use of "present continuous - stimulating" is wrong here. Hence, A, C and D are out. E could be eliminated for unnecessary use of passive voice in the sentence. Hence, B is the answer.

NandishSS wrote:Even though recent national statistics suggest a revival in business activity, some credit-market analysts maintain that the Federal Reserve Board needs to lower short-term interest rates further for stimulating the economy.

A.the Federal Reserve Board needs to lower short-term interest rates further for stimulating
B.the Federal Reserve Board needs to lower short-term interest rates further in order to stimulate
C.the need is for the Federal Reserve Board to lower short-term interest rates further for stimulating
D.there need to be a further lowering by the Federal Reserve Board of short-term interest rates for the purpose of stimulating
E.short-term interest rates need to be lowered further by the Federal Reserve Board so as to stimulate

OA:B

Source:GMATPrep EP2

in A, "for stimulating" can not modify "rates" because "further" is adverb . noun modifier can not jump over an adverb to modify its noun. " a pen for writing" is good.
"for stimulating" tries to modify the preceding clause, showing its purpose. but it is ungrammatical. for doing can not show a purpose of the main clause. for doing can be used to show purpose of a noun such as in " a pen for writing".
if passive sentence contain "by+noun as agent", it is likely that the sentence is wrong. why agent appear in "by +agent" but not in the subject role? passive sentences are normally correct when no agent, no "by+noun" exist. if the agent is not important, do not include it in the sentence. if the agent is important, put agent in the role of subject of the sentence.

passive sentence however, is inferior pattern. inferior pattern is wrong only when there is another better choice. inferior pattern can be right if other choices have clear errors.