1.) It is much easier to be admitted to a masters program than a PhD program, even if the masters program is at a higher ranked school.
2.) It's hard to say; performing well in grad coursework is a good signal, but it'll be very hard to get to know professors in the short time frame between when you enroll and when you have to send out applications to PhD programs. Also, you'll most likely be sending out apps before you have fall grades on your grad transcript. Most people who move on to a top-10 from a masters are not from the US and got their masters in their home country (or, if they are from the US, at LSE or a good Canadian school).
A much better strategy would be to take grad classes at your current school with professors you've worked with before. The grades will look good and the professors will be able to write better LORs. Grad micro is especially important, so take that if possible.
3.) Do you mean staying for a fifth year at your current institution? If you can afford that and you spend the time RAing/taking grad classes, it'll probably be well worth it. Also, you'll have more classes on your transcript when you send out applications.
4.) Not sure about this one. If you think you've got a shot at the PhD, go for that. And remember, you can always email them about their policies.



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