Much attention is presently being given to what is termed "functional illiteracy". This should not be confused with the problem of illiteracy, that is, the inability to read and write. Current United Nations(UNESCO) figures indicate that 99 percent of all Americans are literate, the same figure assigned to nations such as Britain, Germany. Functional illiteracy, by contrast, is concerned with how much difficulty people have in actually using and writing skills in everyday situations. This might be interpreted, for example, as the relative ability to understand federal income tax forms, or printed instructions, or how well someone can write a letter of complaint, or apply in writing for a job.
There are no agreed-upon definitions of what functional illiteracy is and, in practice, definitions vary widely. For many years, reading tests have been used throughout the country which define reading ability by grade level. "Tenth-grade reading level" for instance, would be the average reading score of all pupils who have completed ten years of school. There are, of course, many different reading tests and types of tests. One definition of functional illiteracy holds that anyone is "illiterate" who reads at less than an eighth-grade level. Another common definition uses a twelfth-grade level(the last year of high school in the U.S.).
There seems to be general agreement that at least one-tenth of all Americans are functionally illiterate in English to some degree. It is also hardly surprising that those nations which(like the U.S.) have paid most attention to this concept, and which have nation-wide testing, have found the greatest problems. As one educator humorously put it, "Reading tests cause illiteracy". Canada, for example, which also has a large non-English-speaking immigrant population, has recently found that many of her citizens, too, are functionally illiterate. The attention given to this problem, therefore, reflects the fact that in North America schools as well as pupils are continually tested.
What does "illiteracy" in line 1 mean？

Ability to read and write.
B. Ability to appreciate literature.
C. Lack of interest in literature.
D. Inability to read and write.