Anne adds granulated sugar to water and stirs it until all the sugar dissolves, leaving a sweet, transparent liquid. Under which category should she classify that liquid? A. solution B. compound C. suspension D. colloid

That is a solution. Typical because the liquid is clear and there are no suspended solids. Driving off the water by evaporation will leave behind the original solute (sugar) indicating that it is unlikely that a compound was formed. Colloids are typically (but not always) cloudy (as are some suspensions when the particle size is small enough).