A clade is a group of organisms which includes all of the descendants and only the descendants of a common ancestor (example: Animal Kingdom). A grade is a group of organisms which share some important and interesting common characteristics (example: Protostome animals, which are the clade of all animals above the most basic Metazoans minus the Deuterostomes). A grade might be some part of a clade useful to study as a group.
Work Step by Step
See p. 675 for the definitions of these terms, and then look at Fig. 32.11 and try to identify examples of each to use as examples in your answer.