Section Details

What are ‘Reading Comprehensions’?
Reading Comprehension, on the surface, is a simple exercise. It simply asks a student to read the passage and solve the questions on the basis of the information in the passage. Seems a simple exercise but this simple task can cause a lot of pain.

Problems with Solving RC

There are four basic problems that one faces with solving passages:
1. Lack of Reading Habit & Interest in reading
2. A slow Reading speed
3. Lack of comprehension & regression
4. Question Handling: Unable to identify the hidden & implicit meanings

The solutions for these problems are simple and as follows:
1. Lack of Reading Habit & Interest in reading: START WITH READING WHAT YOU LIKE.
2. A slow Reading speed: THE MORE YOU READ, THE FASTER YOU READ.
3. Lack of comprehension & regression: THE MORE DIVERSELY YOU READ, THE GREATER YOU UNDERSTAND.
4. Question Handling: Unable to identify the hidden & implicit meanings : We will deal with all question types in detail.

If you have a close look above, the one magic word that solves all our problems is READING, that will be out focus for this section of your prep. But what do you need to read? Look below.

Reading Tasks

The basic methodology that we suggest our students to follow: read as much as you can, and READ diversely. When we say read in a diverse manner, we mean read almost anything under the sun. We cover articles on two themes you in this section as an illustration for what kind of material you need to read:

  • Communism and socialism
  • Economics

For the articles given in the two sections below, a student needs to carry out the following tasks:

  • Identify the main idea of the article. Try to summarize it in as few words as possible.
  • Identify the phrases or parts you did not understand. (you can mail those to us for explanation).
  • Identify any vocabulary related issue that you faced.

The object of the whole exercise is to identify issue with your reading habits and expose you to the kind of material that you will face in the actual CAT 2016 exam.

Sample topic 1: Communism and Socialism

Article 1: Introduction to Socialism

I received this article as an E-mail and really loved it. This is the simplest possible introduction that can be given to the ideology of Socialism. And hope you would appreciate it to.

As the late Adrian Rogers said, “you cannot multiply wealth by dividing it.”

An economics professor at a local college made a statement that he had never failed a single student before, but had once failed an entire class.
That class had insisted that Obama’s socialism worked and that no one would be poor and no one would be rich – a great equalizer.
The professor then said, “OK, we will have an experiment in this class on Obama’s plan”. All grades would be averaged and everyone would receive the same grade, so no one would fail and no one would receive an A.
After the first test, the grades were averaged and everyone got a B. The students who studied hard were upset and the students who studied little were happy.
As the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too, so they studied little.

The second test average was a D! No one was happy.
When the 3rd test rolled around, the average was an F.

The scores never increased as bickering, blame and name-calling all resulted in hard feelings and no one would study for the benefit of anyone else.

All failed, to their great surprise and the professor told them that socialism would also ultimately fail, because when the reward is great, the effort to succeed is great, but when government takes all the reward away, no one will try or want to succeed.

Could not be any simpler than that.

Article 2: What is the difference between socialism and communism?

Socialism and communism are alike in that both are systems of production for use based on public ownership of the means of production and centralized planning. Socialism grows directly out of capitalism; it is the first form of the new society. Communism is a further development or “higher stage” of socialism.

From each according to his ability, to each according to his deeds (socialism). From each according to his ability, to each according to his needs (communism).

The socialist principle of distribution according to deeds— that is, for quality and quantity of work performed, is immediately possible and practical. On the other hand, the communist principle of distribution according to needs is not immediately possible and practical—it is an ultimate goal.

Obviously, before it can be achieved, production must reach undreamed of heights—to satisfy everyone’s needs there must be the greatest of plenty of everything. In addition, there must have developed a change in the attitude of people toward work—instead of working because they have to, people will work because they want to, both out of a sense of responsibility to society and because work satisfies a felt need in their own lives.

Socialism is the first step in the process of developing the productive forces to achieve abundance and changing the mental and spiritual outlook of the people. It is the necessary transition stage from capitalism to communism.

It must not be assumed, from the distinction between socialism and communism, that the political parties all over the world which call themselves Socialist advocate socialism, while those which call themselves Communist advocate communism. That is not the case. Since the immediate successor to capitalism can only be socialism, the Communist parties,-like the Socialist parties, have as their goal the establishment of socialism.

Are there, then, no differences between the Socialist and Communist parties? Yes, there are.

The Communists believe that as soon as the working class and its allies are in a position to do so they must make a basic change in the character of the state; they must replace capitalist dictatorship over the working class with workers’ dictatorship over the capitalist class as the first step in the process by which the existence of capitalists as a class (but not as individuals) is ended and a classless society is eventually ushered in. Socialism cannot be built merely by taking over and using the old capitalist machinery of government; the workers must destroy the old and set up their own new state apparatus. The workers’ state must give the old ruling class no opportunity to organize a counter-revolution; it must use its armed strength to crush capitalist resistance when it arises.

The Socialists, on the other hand, believe that it is possible to make the transition from capitalism to socialism without a basic change in the character of the state. They hold this view because they do not think of the capitalist state as essentially an institution for the dictatorship of the capitalist class, but rather as a perfectly good piece of machinery which can be used in the interest of whichever class gets command of it. No need, then, for the working class in power to smash the old capitalist state apparatus and set up its own—the march to socialism can be made step by step within the framework of the democratic forms of the capitalist state.

The attitude of both parties toward the Soviet Union grows directly out of their approach to this problem. Generally speaking, Communist parties praise the Soviet Union; Socialist parties denounce it in varying degrees. For the Communists, the Soviet Union merits the applause of all true believers in socialism because it has transformed the socialist dream into a reality; for the Socialists, the Soviet Union deserves only condemnation because it has not built socialism at all—at least not the socialism they dreamed of.

Instead of wanting to take away people’s private property, socialists want more people to have more private property than ever before.

There are two kinds of private property. There is property which is personal in nature, consumer’s goods, used for private enjoyment. Then there is the kind of private property which is not personal in nature, property in the means of production. This kind of property is not used for private enjoyment, but to produce the consumer’s goods which are.

Socialism does not mean taking away the first kind of private property, e.g. your suit of clothes; it does mean taking away the second kind of private property, e.g. your factory for making suits of clothes. It means taking away private property in the means of production from the few so that there will be much more private property in the means of consumption for the many. That part of the wealth which is produced by workers and taken from them in the form of profits would be theirs, under socialism, to buy more private property, more suits of clothes, more furniture, more food, more tickets to the movies.

More private property for use and enjoyment. No private property for oppression and exploitation. That’s socialism.

Huberman and Sweezy, “Introduction to Socialism,” Monthly Review

Sample topic 2: Economics

The Third Depression By PAUL KRUGMAN

Recessions are common; depressions are rare. As far as I can tell, there were only two eras in economic history that were widely described as “depressions” at the time: the years of deflation and instability that followed the Panic of 1873 and the years of mass unemployment that followed the financial crisis of 1929-31.

Neither the Long Depression of the 19th century nor the Great Depression of the 20th was an era of nonstop decline — on the contrary, both included periods when the economy grew. But these episodes of improvement were never enough to undo the damage from the initial slump, and were followed by relapses.

We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression than the much more severe Great Depression. But the cost — to the world economy and, above all, to the millions of lives blighted by the absence of jobs — will nonetheless be immense.

And this third depression will be primarily a failure of policy. Around the world — most recently at last weekend’s deeply discouraging G-20 meeting — governments are obsessing about inflation when the real threat is deflation, preaching the need for belt-tightening when the real problem is inadequate spending.

In 2008 and 2009, it seemed as if we might have learned from history. Unlike their predecessors, who raised interest rates in the face of financial crisis, the current leaders of the Federal Reserve and the European Central Bank slashed rates and moved to support credit markets. Unlike governments of the past, which tried to balance budgets in the face of a plunging economy, today’s governments allowed deficits to rise. And better policies helped the world avoid complete collapse: the recession brought on by the financial crisis arguably ended last summer.

But future historians will tell us that this wasn’t the end of the third depression, just as the business upturn that began in 1933 wasn’t the end of the Great Depression. After all, unemployment — especially long-term unemployment — remains at levels that would have been considered catastrophic not long ago, and shows no sign of coming down rapidly. And both the United States and Europe are well on their way toward Japan-style deflationary traps.

In the face of this grim picture, you might have expected policy makers to realize that they haven’t yet done enough to promote recovery. But no: over the last few months there has been a stunning resurgence of hard-money and balanced-budget orthodoxy.

As far as rhetoric is concerned, the revival of the old-time religion is most evident in Europe, where officials seem to be getting their talking points from the collected speeches of Herbert Hoover, up to and including the claim that raising taxes and cutting spending will actually expand the economy, by improving business confidence. As a practical matter, however, America isn’t doing much better. The Fed seems aware of the deflationary risks — but what it proposes to do about these risks is, well, nothing. The Obama administration understands the dangers of premature fiscal austerity — but because Republicans and conservative Democrats in Congress won’t authorize additional aid to state governments, that austerity is coming anyway, in the form of budget cuts at the state and local levels.

Why the wrong turn in policy? The hard-liners often invoke the troubles facing Greece and other nations around the edges of Europe to justify their actions. And it’s true that bond investors have turned on governments with intractable deficits. But there is no evidence that short-run fiscal austerity in the face of a depressed economy reassures investors. On the contrary: Greece has agreed to harsh austerity, only to find its risk spreads growing ever wider; Ireland has imposed savage cuts in public spending, only to be treated by the markets as a worse risk than Spain, which has been far more reluctant to take the hard-liners’ medicine.

It’s almost as if the financial markets understand what policy makers seemingly don’t: that while long-term fiscal responsibility is important, slashing spending in the midst of a depression, which deepens that depression and paves the way for deflation, is actually self-defeating.

So I don’t think this is really about Greece, or indeed about any realistic appreciation of the tradeoffs between deficits and jobs. It is, instead, the victory of an orthodoxy that has little to do with rational analysis, whose main tenet is that imposing suffering on other people is how you show leadership in tough times.

And who will pay the price for this triumph of orthodoxy? The answer is, tens of millions of unemployed workers, many of whom will go jobless for years, and some of whom will never work again.

Why Paul Krugman is Wrong — More Government Spending Won’t Boost Economy

Liberals, we are told, are becoming anxious. They have seen their champion crossed and double crossed; oil rig explosions, Greek tragedies, bank failures, Israeli intransigence, military arrogance, coal mine cave-ins — all have conspired to throw President Obama’s agenda – the liberal agenda – off center stage.

Massive health care and financial industry overhauls are just the headers on the to-do list – yet to come are card-check, cap-and-trade, and a host of other programs. Time may be running out. Opportunities like this – a majority in Congress, a pliant president and a populace wanting change – don’t pop up often.

Left off the list of frustrations is this: the liberal program is not working. We have spent more than one trillion dollars now, an amount so vast most people can’t even remember how many zeros are involved, and unemployment is still ravaging the economy.

We have 15 million people out of work and another 8.8 million not able to find full-time jobs. So – 23.8 million people without proper employment – it is a horror. There is even talk that we might sink into a depression – this from economist (and New York Times columnist) Paul Krugman who urges new government programs with the constancy of the sunrise.

Despite the absolute, positive assurance of Mr. Krugman that the country’s salvation lies in more government spending, people are beginning to wonder if another $100 billion (a rounding error, by comparison) spent extending unemployment benefits or propping up state budgets will really help the United States grow.

It is unlikely. I have a theory, and like any economist worth her salt, I am putting a name on it — the Debt/Stimulus/Confidence Frontier. The concept is simple: while deficit spending is sometimes necessary in the early stages of a recession to jolt the economy and especially to provide the consumer with some extra buying power, there comes a point at which increased indebtedness has a negative effect – on confidence, and then on GDP.

An increasingly educated population and the visible evidence of the harm done to debt-laden countries like Greece have made people wary of weakening our country’s balance sheet. Thus, piling on borrowings now will dampen consumer and investor confidence and boost the savings rate, thwarting the stimulus impact.

Some evidence of this chain reaction surfaced today with the announcement that consumer confidence had taken a significant and unexpected plunge in June. The Conference Board’s index tumbled 10 points – from 62.7 in May to 52.9. Most economists had been forecasting 62.8.

There is no precise amount of debt or deficit spending relative to GDP that undermines optimism. It depends on the resources of the country in question, the size of the economy, the convertibility of the currency and other factors. It’s like pornography: we know it when we see it.

Clearly, in this cycle, we crossed the Debt/Stimulus/Confidence Frontier last year. The rise of the Tea Partiers was only one symptom of popular hostility to increased borrowings.

President Obama’s slipping approval ratings were another. Polls confirm the grumpiness of all those middle-aged middle Americans. They were incensed that future generations were being saddled with unpayable debts, and they knew that taxes would have to rise to cover the cost. They also doubted that further government spending would provide a real boost to jobs or to growth.

They were right, because as anxieties grew over the country’s balance sheet, the consumer hunkered down and increased her savings rate. In the most recent month, consumer spending slipped from the level of the first quarter, and the savings rate rose to 4 percent — three times the pre-recession level.

This is the mechanism behind my theory. A naturally cautious response on the part of the consumer begins to thwart ever-higher outlays by the government.

Liberals often fail to take into account human nature. Just as socialist economies like East Germany or Russia ultimately fail because they ignore the self-interest that stimulates a market economy – the liberal notion of all-purpose government sustenance is irreconcilable with the very human instinct of self-protection.

This is not to argue against all government intervention. The initial monies spent to shore up the banks steadied our financial markets in the nick of time. The frantic passage of TARP and other backstops provided to our biggest banks reassured investors and savers who had at the depth pulled half a trillion dollars out of money market funds. We were well on our way to stashing the nation’s cash under a mattress.

The $800 billion stimulus program also gave the economy a lift. Though the disbursement of funds was in some cases hare-brained and certainly did not make our national chest swell with pride – no Hoover Dams or Cape Cod Canals this time around – Americans regained their confidence that the black hole was closing, not spreading, and that normal life would soon resume.

But, more recent efforts to jump start the economy – for instance the cash for clunkers, and the homebuyer credit — have been less effective. First-quarter growth has been revised downward twice, from the original estimate of 3.2 percent to 3 percent and more recently to 2.7 percent — quite a slump from the fourth quarter, when the economy advanced at 5.6 percent.

What changed? Consumer spending was up less robustly than previously thought — only 3 percent, not 3.5 percent. Final sales for the economy overall rose only 0.8 percent, rather than the 1.4 percent previously cited. Indeed, almost all the growth came from inventory restocking. This deceleration followed the much-publicized fiscal problems in Greece, which threatened to take down the EU. Americans quickly imported anxiety from abroad and cut back spending.

In upcoming elections, President Obama’s champions will take credit for the turnaround in the economy, which he will ascribe to massive stimulus spending. In fact, as the Obama team continues to promote unsafe levels of debt and deficits, they will be slowing our recovery.


The objective of the above exercise (to make one read such long and boring articles) is one simple one: just to give a taste of what qualifies as quality reading. It is imperative to be involved in good reading habits and to have the necessary skill to analyze articles so that one is able to discern the right answers. In the second part of RC coverage, we deal with RC question types with details.
Topic Assignment
Click here to view assignment.

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