The correct sentence that uses the vague pronoun in the sentence is, but they stopped doing that after she lost an expensive sweater MIA had borrowed from Lucy.
Vague pronouns are the words like that, which, if, it, etc. A pronoun is a word that replaces the noun, by the words, like he, she, it, they.
An example is Deena wears, hat, she has a hat.
Thus, the correct option is b.
Learn more about vague pronouns.
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