Question:medium

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: Jul 1, 2026
  • Option 1
  • Option 2
  • Option 3
  • Option 4
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The Correct Option is C

Solution and Explanation

Approach: Match the time-frame. The given sentence has a distinctive 'once X, now Y' structure. Find the blank whose surrounding text also runs on that once-versus-now axis; that is where it belongs.

Read the sentence's clock: 'Productivity gains, once expected to feed through to broader living standards, now primarily serve to enhance returns to wealth' - past expectation defeated, present reality favouring wealth.

Audit each blank for the same clock: Around Blank 1 the discussion is definitional (inequality as a condition of growth) - no past/present pivot. Around Blank 2 the text lists what wealth depends on - static description, no time contrast. Around Blank 3 the sentence right before reads 'the erosion of mechanisms that once constrained it' (note the word 'once') and the sentence right after says capital income 'has been boosted by design' (the present outcome). This is precisely the once-then-now movement the insert carries. Around Blank 4 capital income has already been explained, so the insert would only repeat.

Blank 3 is the only spot whose neighbours share the once-to-now logic, so the productivity sentence slots there as the concrete example of the eroded mechanism.

Answer: Option 3.
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