Here is the sentence:

Saxe, Diane's horse, will let you know when she deserves another carrot or apple. She sticks out her tongue so that it __________ outside her mouth like a long, fat, pink worm.

Saxe's tongue rests outside her mouth. Thus, you need a form of lie. Since the sentence is present tense, you need the simple present form. You chose the correct form from the table below. Good job!

Infinitive Definition Simple Present Simple Past Past Participle Present Participle
to lay to put something down lay(s) laid laid laying
to lie to rest or recline lie(s) lay lain lying

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