Is the underlined group of words an adjective phrase or an adjective clause? "At school he saw many people studying for tests."

Responses
A adjective phraseadjective phrase
B adjective clause

The underlined group of words "studying for tests" is an adjective phrase (although it's not underlined in the way you've presented it here).

This phrase is modifying the noun "people" to describe what kind of people he saw. It doesn't contain a subject and a verb acting as a clause, but rather functions as an adjective would, by providing additional information about the noun. Therefore, the correct answer is:

A adjective phrase