The correct answers are external and temporary.
Answer 1: Explaining failures in terms that are external is useful to break the vicious cycle of depression, because when people claim that they have "failed" due to factors external to them (outside their control) rather than factors internal to them, they are less likely to blame themselves for what is not going well in their life. When people stop blaming themselves or their own shortcomings for failing, they are more likely to break the cycle of depression.
Answer 2: Explaining failures in terms that are temporary is useful to break the vicious cycle of depression. For instance let's say Sally has not performed as well as expected on her SATs. In other words, she failed to achieve something she had hoped for. If Sally sees this failure as something that will affect her long-term rather than temporarily, she is much more likely to be depressed than if she perceived the failure as temporary.