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)____.

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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: Dec 5, 2025
  • Option 1
  • Option 2
  • Option 3
  • Option 4
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The Correct Option is C

Solution and Explanation

Step 1: Understanding the Passage.
The passage discusses inequality, its relation to wealth, and how wealth and income are interrelated but influenced by political choices.
Step 2: Analysis of Options.
- (1) introduces the issue well by talking about the condition of inequality.
- (2) provides an explanation of the factors influencing wealth.
- (3) fits well as it talks about the political choices influencing wealth, making it the best fit.
- (4) brings in more specific details about wealth accumulation, which is important but not a perfect fit here.
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