Question:
The given sentence is missing in the paragraph below. Decide where it best fits among the options 1, 2, 3, or 4 indicated in the paragraph.
Sentence: Productivity gains, once expected to feed through to broader living standards, now primarily serve to enhance returns to wealth.
Paragraph: Economists now argue that inequality is no longer a by-product of growth but a condition of it. ____ (1)____. Unlike wages, wealth reflects not just income but also access to assets, favourable institutional conditions—such as low interest rates—and public policies like low taxes and housing shortages. ____ (2)____. In other words, wealth depends on political choices in ways that income currently does not. It’s not just the inequality itself that is the issue but the erosion of mechanisms that once constrained it. ____ (3)____. Wealth and income inequality are linked, but where wages have stagnated and collective bargaining has weakened, capital income—derived from profits, rents and interest—has been boosted by design. ____ (4)____.
The given sentence is missing in the paragraph below. Decide where it best fits among the options 1, 2, 3, or 4 indicated in the paragraph.
Sentence: Productivity gains, once expected to feed through to broader living standards, now primarily serve to enhance returns to wealth.
Paragraph: Economists now argue that inequality is no longer a by-product of growth but a condition of it. ____ (1)____. Unlike wages, wealth reflects not just income but also access to assets, favourable institutional conditions—such as low interest rates—and public policies like low taxes and housing shortages. ____ (2)____. In other words, wealth depends on political choices in ways that income currently does not. It’s not just the inequality itself that is the issue but the erosion of mechanisms that once constrained it. ____ (3)____. Wealth and income inequality are linked, but where wages have stagnated and collective bargaining has weakened, capital income—derived from profits, rents and interest—has been boosted by design. ____ (4)____.
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The key is understanding the flow of economic arguments, where political decisions about wealth are critical to understanding inequality.
Updated On: Mar 23, 2026
- Option 1
- Option 2
- Option 3
- Option 4
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The Correct Option is C
Approach Solution - 1
To determine the best fit for the given sentence within the paragraph, we need to understand the thematic flow and context of each portion of the paragraph. Let's analyze each section:
- Section 1: Discusses inequality as a condition for growth rather than a by-product. This introduction sets up a discussion about the dynamics of wealth and inequality.
- Section 2: Describes how wealth is influenced by various external factors beyond simple income, such as assets, policies, and institutional conditions.
- Section 3: Indicates a transition in the narrative. It concerns the erosion of mechanisms that once curbed inequality, with a focus on the changing dynamics of income and wealth. This is where the logical fit for the given sentence occurs. The misplaced sentence discusses how productivity gains, which were expected to improve living standards across the board, now mainly increase wealth returns. This is directly related to the erosion mentioned, as productivity gains are now not contributing to equalizing living standards but serving only the wealthy, contributing to inequality.
- Section 4: Focuses on the linked nature of wealth and income inequality, discussing stagnation in wages versus the increase in capital income. This section builds upon the previously introduced concepts of wealth and political choices, reflecting the results of these dynamics.
Given this analysis, the correct position for the sentence is Option 3. Its placement solidifies the narrative that existing structures and productivity benefits are serving the wealthy, thus explaining the erosion of previous mechanisms that constrained inequality.
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Approach Solution -2
The given sentence, "Productivity gains, once expected to feed through to broader living standards, now primarily serve to enhance returns to wealth," provides insight into the modern economic structure where productivity improvements no longer translate to better living standards for the general populace but largely benefit those already holding wealth. Understanding the paragraph in the context of rising inequality is key to finding the correct insertion point for this sentence.
Let's analyze the paragraph to determine the best placement for the given sentence:
- After examining Option 1, we see this sentence explains economic inequality rather than discussing productivity gains directly, thus it does not aptly fit here.
- Looking at Option 2, the discussion revolves around political choices affecting wealth. Again, this does not closely align with the provided sentence concerning productivity gains.
- In Option 3, there is a discussion about the mechanisms that have eroded and failed to constrain inequality. Here, the sentence about productivity gains fits well as it provides a specific example of a mechanism that used to constrain inequality but now contributes to it.
- Finally, Option 4 deals with the stagnation of wages and the enhancement of capital income. The sentence on productivity gains does not directly relate to this idea of capital income and wage stagnation.
Therefore, the correct placement is at position 3 in the paragraph. It accurately explains how the changes in productivity relate to the broader themes of inequality and economic policies mentioned in the paragraph.
In conclusion, the sentence best fits in Option 3, as it provides a clear connection to the point about the erosion of mechanisms that used to limit inequality but now reinforce it.
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Top CAT Verbal Ability & Reading Comprehension (VARC) Questions
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In the late 1960s, while studying the northern-elephant-seal population along the coasts of Mexico and California, Burney Le Boeuf and his colleagues couldn’t help but notice that the threat calls of males at some sites sounded different from those of males at other sites. . .. That was the first time dialects were documented in a nonhuman mammal. . ..
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Nouns and verbs are the two indispensable parts of writing. Without one of each, no group of words can be a sentence, since a sentence is, by definition, a group of words containing a subject (noun) and a predicate (verb); these strings of words begin with a capital letter, end with a period, and combine to make a complete thought which starts in the writer’s head and then leaps to the reader’s.
Must you write complete sentences each time, every time? Perish the thought. If your work consists only of fragments and floating clauses, the Grammar Police aren’t going to come and take you away. Even William Strunk, that Mussolini of rhetoric, recognized the delicious pliability of language. “It is an old observation,” he writes, “that the best writers sometimes disregard the rules of rhetoric.” Yet he goes on to add this thought, which I urge you to consider: “Unless he is certain of doing well, [the writer] will probably do best to follow the rules.”
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