The first sentence of the stimulus says that "For a work to be rightly thought of as world literature, it must be received and interpreted within the writer's own national tradition AND within external national traditions." It then goes on to give the three possible ways in which work can be counted as "interpreted." All three definitions of "interpreted" involve influencing the development of later works.
Now let's look at answer choice E. If a work only affects the development of ONLY ONE national tradition, then it cannot be counted as interpreted BOTH in the author's own national tradition AND others.
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