This uses a container clue combined with an anagram. A container clue means one word or set of letters goes inside another word, and an anagram means rearranging letters based on an indicator word.
Look for an anagram indicator that tells you to rearrange the letters of 'rate'. Then find a word meaning 'things that are untrue' that needs to be placed inside those rearranged letters.
Answer: EARLIEST | 'Novel' indicates an anagram of RATE giving EART. 'Things that are untrue' = LIES, which goes inside: E-LIES-ART becomes EARLIEST (first).