No, Jeff-- the clause is inverted. A withdrawal of belief in psychoanalysis (S) is observable etc. Observable is a predicate adjective.
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I was alway caught by your hawk-eyes.
(A) would have been more competetive without the typo of 'certainly'. (Should have been 'certainty'.)
Jeff_999But what do you mean "more competitive"?'More competitive' is my way of saying that 'certainty' in the sentence offers a better test choice than 'certainly'--even though (A) would still have been the wrong answer.
"We no longer feel that it can solve our emotional problems." Here it refers to 'belief in psychoanalysis', right?
To be precise, it refers to psychoanalysis only.