CAT 2025 Slot 3 · VARC · Question 13

The missing sentence says productivity gains, once expected to raise living standards generally, now mainly boost returns to wealth. Note its shape: an old expectation, then a redirection of the benefit toward wealth rather than wages.

Blanks 1 and 2 sit inside a self-contained stretch contrasting wealth with wages – wealth reflects assets, institutional conditions and public policy, and therefore 'wealth depends on political choices in ways that income currently does not'. Inserting the missing sentence into either blank interrupts a claim and its restatement.

Blank 3 is tempting. The sentence before it says the issue is 'the erosion of mechanisms that once constrained' inequality, and the missing sentence does describe something that once worked differently. But read what follows blank 3: 'Wealth and income inequality are linked, but where wages have stagnated and collective bargaining has weakened, capital income... has been boosted by design.' That sentence is itself the explanation of the eroded mechanisms, and it leads straight on from the sentence before it. Putting the missing sentence between them separates the claim from its explanation.

Blank 4 is the right slot. The sentence before it establishes that wages have stagnated while capital income has been boosted by design. The missing sentence then draws the consequence in the same direction – the gains from productivity now flow to wealth rather than to living standards – and closes the paragraph on the point it has been building toward.

Shortcut: when a candidate blank sits between a general claim and its own explanation, it is a decoy. Check whether the two sentences flanking a blank already answer each other; if they do, the blank is not the gap.

The answer is 'Option 4', which is listed third. Hence, the answer is option 3.