The hyphen (dash) does not need to be placed anywhere in that particular sentence, but it can be placed between "inner" and "city". You do however require commas in the sentence; "Basketball, which has long been thought to be an inner city game, is extremely popular in the suburbs."
I believe the correct answer is C
The correct answer is cause/effect.
Cause and effect is the principle of causality establishing <em>one event or action</em> <em>as the direct result of another</em>.
One event causes another to happen. A cause creates an effect.
Because I went to Washington (cause) and I visited many monuments and museums, I now have new insight into the history of the United States (effect).
The insight I have now (effect) happened because I went to Washington (cause).