Apparently neither one of us is smart enought to take the GMAT because I can't figure it out either.  It must be a trick question.

Hmm... I get that people of mixed races want to be recognized as this (and well, I would too) but somewhere down the road there was someone who had a big ol' hissy fit about the fact that they weren't multi-racial but multi-ethnic.  But according to the dictionary:

multiracial - of, pertaining to, or representing more than one race

    race -  of or pertaining to the races of humankind

multiethnic - involving or pertaining to two or more distinct ethnic groups

    ethnic - pertaining to or characteristic of a people, esp. a group (ethnic group) sharing a common and distinctive culture, religion, language, or the like

So, my guess is that if a person was a Jewish Catholic or a French Muslim then it would be ethnic while the obvious race combinations African/Asian/European/etc would be race.  Still think its kind of silly, but I'm sure I could offend (and I just might be happy about it).

whoa...lol, they should really give you some more direction on that question!