Hathorne states, “At every execution I have seen naught but high satisfaction in the town.” Do you believe it and why?

explanation:

the goblins and dwarves have different perspectives of things. bilbo is a hobbit and goblins dwarves and hobbits all believe and do a different way of living

the pronoun reference replaces a noun, but you have to make sure there's no room for confusion.

in the first sentence "her" could be referring to shely or to the sister. the answer there is "shelly called her sister and told her about the new baby."

in the second sentence "it" could be referring to the roof or the floor. the answer there is "since the roof leaks on the family room floor, we need to repair the roof."