Question

The Bank of Australia raised its principal interest rate by a half percentage point to 5.25%, which is expected to cool demand and make future increases less likely. A. The Bank of Australia raised its principal interest rate B. The Bank of Australia’s principal interest rate raised C. The Bank of Australia raised its principal interest rates D. The Bank of Australia raised it principal interest rate E. The Bank of Australia raised it principal interest rates

Short answer

A. The Bank of Australia raised its principal interest rate

Step-by-step solution

Identify the Subject-Verb Agreement

Focus on the subject and verb in the sentence to ensure they agree in number and tense. In this case, 'The Bank of Australia' is the subject and 'raised' is the verb. Both should align properly.

Check for Correct Usage of 'Its' and 'It'

Verify the use of 'its' versus 'it'. 'Its' is a possessive adjective, used to show possession, while 'it' is a pronoun. In the sentence, 'its' should be used to show possession of the interest rate.

Ensure Correct Plurality of 'Rate'

Determine whether 'rate' should be singular or plural. The context indicates that it is referring to a single rate, thus 'rate' should be singular.

Evaluate Each Option

Review each option to ensure they meet the criteria identified in the previous steps.

Choose the Correct Answer

Based on the given criteria: - A. 'The Bank of Australia raised its principal interest rate' aligns with subject-verb agreement, uses 'its' correctly, and uses 'rate' singularly. - B. 'The Bank of Australia’s principal interest rate raised' incorrectly places 'rate' before the verb. - C. 'The Bank of Australia raised its principal interest rates' incorrectly makes 'rates' plural. - D. 'The Bank of Australia raised it principal interest rate' incorrectly uses 'it' instead of 'its'. - E. 'The Bank of Australia raised it principal interest rates' incorrectly uses 'it' instead of 'its' and makes 'rates' plural.

Key concepts

Subject-Verb Agreement

Understanding subject-verb agreement is essential to grammatical accuracy. The subject and the verb in a sentence must agree in number. This means:

• If the subject is singular, the verb must be singular too.
• If the subject is plural, the verb must be plural.

In the example, 'The Bank of Australia' is a singular subject. Therefore, it takes the verb 'raised,' which is also singular. Getting this right is key to ensuring that sentences are clear and grammatically correct.

Possessive Adjectives

Possessive adjectives show ownership or possession.
'Its' is a possessive adjective used to show that something belongs to 'it.'
For example, 'The dog wagged its tail.'
Here, 'its' indicates the tail belongs to the dog.
In the exercise, 'The Bank of Australia raised its principal interest rate,' 'its' correctly shows that the interest rate belongs to the bank. Always remember:

• 'Its' is possessive, showing something belongs to 'it.'
• 'It' is a pronoun, simply standing in for a noun.

Wrong use of 'its' and 'it' can change the meaning of a sentence or make it grammatically incorrect.

Singular and Plural Nouns

Choosing between singular and plural nouns depends on the context.
Singular nouns refer to one item, and plural nouns refer to more than one.
For example:

• 'Rate' vs. 'Rates'
• 'Dog' vs. 'Dogs'

In the exercise, 'rate' is singular because it refers to a single principal interest rate.
Mistaking singular for plural, like changing 'rate' to 'rates,' would incorrectly change the meaning of the sentence.

Sentence Correction

Sentence correction involves reviewing a sentence and making necessary adjustments to improve clarity and grammatical accuracy.
To effectively correct a sentence:

• Ensure subject-verb agreement.
• Check the use of possessive adjectives and pronouns.
• Determine the correct form (singular or plural) of nouns.
• Review the overall structure for coherence.

By following these steps, you can correct sentences to align with standard English grammar rules.