SC: When to use which and rather than vs instead of

[cbang85]

I'm having trouble understanding why the answer to the SC below is B. Why would "which" following the clause be incorrect and when do you use instead of vs rather than? The question came from my Cat 1 exam.

When housing prices climb too quickly, the Federal Reserve often responds by raising the key interest rate, which has the curious effect of actually lowering housing prices instead of raise them, as one might expect.

A which has the curious effect of actually lowering housing prices instead of raise them

B an action that has the curious effect of actually lowering housing prices rather than raising them

C which has the curious effect of actually lowering housing prices instead of raising them

D which rather than raising housing prices actually has the curious effect of lowering them

E an action that has the curious effect of actually lowering housing prices instead of raise them

[tim]

"which" can only modify a specific noun. there is no general rule for use of "instead of" versus "rather than"; you should never have to make a decision between two answer choices that differ only in this regard..