In the passage, select the correct linking word to complete the sentence: _____________ it is more complicated and the private sector is deemed to be intellectually challenged.

Introduction / Context:
This cloze passage compares inflation targeting with another proposal called nominal income targeting. After introducing the more complicated policy, the author comments on its complexity and on how the private sector may be perceived. The blank at the start of the sentence requires a conjunction or linking word that shows contrast between the simple policy discussed earlier and the more complex policy mentioned now.

Given Data / Assumptions:

• We already know from the passage that simple and transparent policies are being discussed.
• The sentence to complete is: _____________ it is more complicated and the private sector is deemed to be intellectually challenged.
• Options: But, Hence, So, Because.
• The preceding sentence introduces nominal income targeting as one such policy.
• The author is contrasting this more complicated policy with the simpler approach of inflation targeting.

Concept / Approach:
In English, the conjunction but is commonly used at the beginning of a sentence to introduce a contrast or qualification. Here, the author wants to say that one such policy exists, but it is more complicated and there is a certain assumption about the private sector. Hence and so are used for results or logical conclusions, while because introduces a reason. None of those fit as well as but when the aim is to signal opposition or contrast with what came before.

Step-by-Step Solution:
Step 1: Consider the sequence: I just note that one such policy is called "nominal income targeting". _____________ it is more complicated and the private sector is deemed to be intellectually challenged. Step 2: Understand that the author is noting a drawback or complication of nominal income targeting compared to simple inflation targeting. Step 3: Test But: But it is more complicated and the private sector is deemed to be intellectually challenged. This signals contrast and sounds natural. Step 4: Test Hence: Hence it is more complicated would mean its complexity is a conclusion drawn from earlier statements, which is not the intended logic. Step 5: Test So: So it is more complicated suggests a result, not a contrast; it does not fit the critical tone. Step 6: Test Because: Because it is more complicated would require a main clause following it; standing alone at the start of this sentence it disrupts the structure. Step 7: Conclude that But is the appropriate connective for introducing a contrasting fact.

Verification / Alternative check:
Read a reconstructed passage fragment: Targeting inflation comes from a belief that policy should be simple and transparent. One such alternative is nominal income targeting. But it is more complicated and the private sector is deemed to be intellectually challenged. This flow clearly contrasts the simplicity of one approach with the complexity of another. Replacing But with Hence or So would wrongly suggest that the complexity is a logical consequence rather than a drawback or opposing feature.

Why Other Options Are Wrong:
Hence is wrong because it indicates a result or consequence (for example, It was raining; hence the delay), which is not the intended relationship here. So is also a result connector and does not capture the idea of contrast. Because is wrong because it typically introduces a reason clause that should be followed by a main clause, and the sentence as given does not provide that structure.

Common Pitfalls:
A common mistake is to pick Hence or So in any formal passage, thinking that these words sound sophisticated. However, connectors must be chosen for logical relationship, not for perceived difficulty. Another pitfall is to overlook the larger passage and treat each blank in isolation. Reading a line or two before and after the blank helps clarify whether the relationship is cause, result, or contrast, which is crucial for picking the right conjunction.

Final Answer:
The correct linking word is But, giving But it is more complicated and the private sector is deemed to be intellectually challenged.