The correct answer is 1) an increase in European dominance in world affairs.
What was not a consequence of World War I was "an increase in European dominance in world affairs."
Indeed, it was quite the opposite. The Western European countries that participated in WWI ended up suffering the pain and destruction as a result of the war.
The consequences of World War I included inflation and bitterness in Germany, a sudden rise of new, unstable democracies in Europe, and prosperity for the U.S.
Some historians consider the terms of the Treaty of Paris and called it unfair or excessive. However, the diplomats and politicians who attended the peace agreement had to evaluate many circumstances when working out the details of the treaty.
US President Wilson had already presented its famous "14 Points Plan" but was rejected by the European allies. They wanted retribution, not peace. They demanded severe punishment for the pain and destruction caused by Germans during the war. That is how Germany had to pay for war reparations.
After the war, the United States lived a prosperous economic period called the "Roaring 1920s."