Although a surge in retail sales have raised hopes that there is a recovery finally under way, many economists say that without a large amount of spending the recovery might not last.
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Mohamed Yasiruddin
Isn't E also incorrect because in the phrase "recovery finally underway" , finally underway ([adverb]+[adjective]) seems to modify recovery. Since an adverb can modify anything apart from a noun, I think E is also incorrect because of this reason.
As Mike notes in a GMAT club thread on this question (http://gmatclub.com/forum/although-a-surge-in-retail-sales-have-raised-hopes-that-126320.html), (E) is awkwardly phrased but whether the choice is grammatically correct is debatable. That said, in the sentence, we're hoping for an action, the action "that a recovery is finally," and not the recovery itself as stated in (E). For that reason, (E) is incorrect.
2 Explanations