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Sentence Correction: Sentence vs. Clause vs. Fragment

Firmly established by the 12th century, the various pilgrimage routes to Santiago de Compostela created a European-wide network of trade, people, and religious and cultural exchange, exemplified in the spread of the Romanesque style of cathedral architecture.

Incorrect.

This answer choice is grammatically incorrect.

In the original sentence the phrase exemplified...architecture modified the noun exchange. In the corrected sentence the addition of the conjugated verb was (was exemplified) turns the last part of the sentence from a modifier into a clause that lacks a subject or some kind of conjunction (like and) to connect the two clauses. We do not know what was exemplified - hence, the last part of the sentence is not a correctly constructed clause, but rather a fragment.

Note that even if the sentence were corrected grammatically (for example, by adding the connector and before was exemplified), this would turn The various pilgrimage routes into the subject of was exemplified (although was would have to be changed to were to agree with the subject routes). But this would also radically change the meaning of the sentence. In the original sentence religious and cultural exchange is exemplified, not the routes.

Incorrect.

This answer choice unnecessarily changes the meaning of the original sentence by turning The spread of the Romanesque style of cathedral architecture into the subject of the sentence, instead of the pilgrimage routes. It also unnecessarily removes the connector and from the parallel construction trade and people and turns them into one concept, trading people

Excellent!

This answer choice places the modifier (Firmly established by the 12th century) directly before the noun it describes (the various pilgrimage routes). The list of the sentence displays correct nested parallelism of (A, B and C): (A) trade, (B) people, and (C) [religious and cultural] exchange.

Note also that the final modifying phrase exemplified in the spread of the Romanesque style of cathedral architecture logically modifies religious and cultural exchange and not network. The network is a network of trade, people and exchange, but the Romanesque style can only be an example of religious and cultural exchange (not of trade and people).

Incorrect.

This answer choice is grammatically incorrect and illogical. The corrected sentence begins with a modifier: Exemplified in the spread of the Romanesque style of cathedral architecture. A modifier should be placed right next to the noun it describes. In the original sentence, this phrase modified the noun religious and cultural exchange. In the corrected sentence however, it is illogically placed before the phrase the various pilgrimage routes.

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Incorrect.

This answer choice is grammatically incorrect and illogical. The corrected sentence begins with a modifier (there are actually two modifiers): Firmly established ... and exemplified ...architecture. A modifier should be placed right next to the noun it describes. In the original sentence, exemplified ... cathedral architecture modified the noun religious and cultural exchange. In the corrected sentence however, it is illogically placed before the phrase the various pilgrimage routes, which it now wrongly modifies. 

[[snippet]]

In addition, the first and third items in the list at the end of the sentence are nouns (people, [cultural] exchange), but the second item is an adjective (religious).

Firmly established by the 12th century, the various pilgrimage routes to Santiago de Compostela created a European-wide network of trade, people, and religious and cultural exchange, exemplified in the spread of the Romanesque style of cathedral architecture.
The various pilgrimage routes to Santiago de Compostela, firmly established by the 12th century, created a European-wide network of trade, people, and religious and cultural exchange, was exemplified in the spread of the Romanesque style of cathedral architecture.
The spread of the Romanesque style of cathedral architecture, exemplifying the religious and cultural exchange created by the European-wide network of trading people on the various pilgrimage routes to Santiago de Compostela, was firmly established by the 12th century.
Exemplified in the spread of the Romanesque style of cathedral architecture, the various pilgrimage routes to Santiago de Compostela were firmly established by the 12th century, creating a European-wide network of trade, people, and religious and cultural exchange.
Firmly established by the 12th century and exemplified in the spread of the Romanesque style of cathedral architecture, the various pilgrimage routes to Santiago de Compostela created a European-wide network of trade and people, religious, and cultural exchange.