Financial analysts said they were surprised that despite higher inflation and shrinking profit margins, investors continue pouring money into the stock market, believing that the American economy was nicely balanced, with little inflation.



(A) continue pouring money into the stock market, believing that the American economy was 


(B) continue pouring money into the stock market, believing in the American economy as 


(C) still continue pouring money into the stock market in the belief that the American economy as


(D) still continued to pour money into the stock market, believing in the American economy as


(E) continued to pour money into the stock market in the belief that the American economy was


This question is based on Tenses, Idiomatic Usage, and Construction.


The first point of elimination in this question is the redundant usage – still continue. Since the verb ‘continue’ already conveys the meaning of ‘even now’, the adverb ‘still’ is redundant in this sentence. So, Options C and D can be eliminated.


The verbs in the first part of the sentence are ‘said’ and ‘were surprised’, both of which are in the past tense. So, the verb in the underlined portion must also be in the same tense to maintain the consistency of tense. Options A and B contain the verb in the simple present tense. So, they can also be eliminated.


In Option E, the verb 'continued' is in the past tense. 

Moreover, the construction of this option is better because the option contains the phrase “in the belief” rather than the participle modifier that has been used in the other options. The phrase “in the belief” makes it clear that it is the investors that continued to pour money into the stock market in the belief that the American economy was stable. 

Another difference between this option and the others is the use of the word ‘belief’. The correct usage is – One believes something is/was… The word ‘belief’ is not followed by the conjunctions ‘as’ in any of its forms.

Therefore, E is the most appropriate option.