Common Description: The passage below is accompanied by four questions. Based on the passage, choose the best answer for each question
Studies showing that income inequality plays a positive role in economic growth are largely based on three arguments. The first argument focuses on investment indivisibilities wherein large sunk costs are required when implementing new fundamental innovations. Without stock markets and financial institutions to mobilize large sums of money, a high concentration of wealth is needed for individuals to undertake new industrial activities accompanied by high sunk costs . . . [One study] shows the relation between economic growth and income inequality for 45 countries during 1966-1995. [It was found] that the increase in income inequality has a significant positive relationship with economic growth in the short and medium term. Using system GMM, [another study estimated] the relation between income inequality and economic growth for 106 countries during 1965- 2005 period. The results show that income inequality has a positive impact on economic growth in the short run, but the two are negatively correlated in the long run. The second argument is related to moral hazard and incentives . . . Because economic performance is determined by the unobservable level of effort that agents make, paying compensations without taking into account the economic performance achieved by individual agents will fail to elicit optimum effort from the agents. Thus, certain income inequalities contribute to growth by enhancing worker motivation . . . and by giving motivation to innovators and entrepreneurs . . . Finally, [another study] point[s] out that the concentration of wealth or stock ownership in relation to corporate governance contributes to growth. If stock ownership is distributed and owned by a large number of shareholders, it is not easy to make quick decisions due to the conflicting interests among shareholders, and this may also cause a free-rider problem in terms of monitoring and supervising managers and workers. . . .
Various studies have examined the relationships between income inequality and economic growth, and most of these assert that a negative correlation exists between the two. . . . Analyzing 159 countries for 1980-2012, they conclude that there exists a negative relation between income inequality and economic growth; when the income share of the richest 20% of population increases by 1%, the GDP decreases by 0.08%, whereas when the income share of the poorest 20% of population increases by 1%, the GDP increases by 0.38%. Some studies find that inequality has a negative impact on growth due to poor human capital accumulation and low fertility rates . . . while [others] point out that inequality creates political instability, resulting in lower investment. . . . [Some economists] argue that widening income inequality has a negative impact on economic growth because it negatively affects social consensus or social capital formation. One important research topic is the correlation between democratization and income redistribution. [Some scholars] explain that social pressure for income redistribution rises as income inequality increases in a democratic society. In other words, when democratization extends suffrage to a wider class of people, the increased political power of low- and middle-income voters results in broader support for income redistribution and social welfare expansion. However . . . if the rich have more political influence than the poor, the democratic system actually worsens income inequality rather than improving it. The primary function of the three-part case for a positive income inequality-economic growth link in the first half of the passage is to show that:

Common Description: The passage below is accompanied by four questions. Based on the passage, choose the best answer for each question
Studies showing that income inequality plays a positive role in economic growth are largely based on three arguments. The first argument focuses on investment indivisibilities wherein large sunk costs are required when implementing new fundamental innovations. Without stock markets and financial institutions to mobilize large sums of money, a high concentration of wealth is needed for individuals to undertake new industrial activities accompanied by high sunk costs . . . [One study] shows the relation between economic growth and income inequality for 45 countries during 1966-1995. [It was found] that the increase in income inequality has a significant positive relationship with economic growth in the short and medium term. Using system GMM, [another study estimated] the relation between income inequality and economic growth for 106 countries during 1965- 2005 period. The results show that income inequality has a positive impact on economic growth in the short run, but the two are negatively correlated in the long run. The second argument is related to moral hazard and incentives . . . Because economic performance is determined by the unobservable level of effort that agents make, paying compensations without taking into account the economic performance achieved by individual agents will fail to elicit optimum effort from the agents. Thus, certain income inequalities contribute to growth by enhancing worker motivation . . . and by giving motivation to innovators and entrepreneurs . . . Finally, [another study] point[s] out that the concentration of wealth or stock ownership in relation to corporate governance contributes to growth. If stock ownership is distributed and owned by a large number of shareholders, it is not easy to make quick decisions due to the conflicting interests among shareholders, and this may also cause a free-rider problem in terms of monitoring and supervising managers and workers. . . .
Various studies have examined the relationships between income inequality and economic growth, and most of these assert that a negative correlation exists between the two. . . . Analyzing 159 countries for 1980-2012, they conclude that there exists a negative relation between income inequality and economic growth; when the income share of the richest 20% of population increases by 1%, the GDP decreases by 0.08%, whereas when the income share of the poorest 20% of population increases by 1%, the GDP increases by 0.38%. Some studies find that inequality has a negative impact on growth due to poor human capital accumulation and low fertility rates . . . while [others] point out that inequality creates political instability, resulting in lower investment. . . . [Some economists] argue that widening income inequality has a negative impact on economic growth because it negatively affects social consensus or social capital formation. One important research topic is the correlation between democratization and income redistribution. [Some scholars] explain that social pressure for income redistribution rises as income inequality increases in a democratic society. In other words, when democratization extends suffrage to a wider class of people, the increased political power of low- and middle-income voters results in broader support for income redistribution and social welfare expansion. However . . . if the rich have more political influence than the poor, the democratic system actually worsens income inequality rather than improving it. Which one of the options below best summarises the passage?

Common Description: The passage below is accompanied by four questions. Based on the passage, choose the best answer for each question.
[S]pices were a global commodity centuries before European voyages. There was a complex chain of relations, yet consumers had little knowledge of producers and vice versa. Desire for spices helped fuel European colonial empires to create political, military and commercial networks under a single power.
Historians know a fair amount about the supply of spices in Europe during the medieval period - the origins, methods of transportation, the prices - but less about demand. Why go to such extraordinary efforts to procure expensive products from exotic lands? Still, demand was great enough to inspire the voyages of Christopher Columbus and Vasco Da Gama, launching the first fateful wave of European colonialism. . . .
So, why were spices so highly prized in Europe in the centuries from about 1000 to 1500? One widely disseminated explanation for medieval demand for spices was that they covered the taste of spoiled meat. . . . Medieval purchasers consumed meat much fresher than what the average city-dweller in the developed world of today has at hand. However, refrigeration was not available, and some hot spices have been shown to serve as an anti-bacterial agent. Salting, smoking or drying meat were other means of preservation. Most spices used in cooking began as medical ingredients, and throughout the Middle Ages spices were used as both medicines and condiments. Above all, medieval recipes involve the combination of medical and culinary lore in order to balance food's humeral properties and prevent disease. Most spices were hot and dry and so appropriate in sauces to counteract the moist and wet properties supposedly possessed by most meat and fish. . . .
Where spices came from was known in a vague sense centuries before the voyages of Columbus. Just how vague may be judged by looking at medieval world maps . . . To the medieval European imagination, the East was exotic and alluring. Medieval maps often placed India close to the so-called Earthly Paradise, the Garden of Eden described in the Bible.
Geographical knowledge has a lot to do with the perceptions of spices’ relative scarcity and the reasons for their high prices. An example of the varying notions of scarcity is the conflicting information about how pepper is harvested. As far back as the 7th century Europeans thought that pepper in India grew on trees "guarded" by serpents that would bite and poison anyone who attempted to gather the fruit. The only way to harvest pepper was to burn the trees, which would drive the snakes underground. Of course, this bit of lore would explain the shriveled black peppercorns, but not white, pink or other colors.
Spices never had the enduring allure or power of gold and silver or the commercial potential of new products such as tobacco, indigo or sugar. But the taste for spices did continue for a while beyond the Middle Ages. As late as the 17th century, the English and the Dutch were struggling for control of the Spice Islands: Dutch New Amsterdam, or New York, was exchanged by the British for one of the Moluccan Islands where nutmeg was grown. If a trader brought white peppercorns from India to medieval Europe, all of the following are unlikely to happen, EXCEPT:

Common Description: The passage below is accompanied by four questions. Based on the passage, choose the best answer for each question.
[S]pices were a global commodity centuries before European voyages. There was a complex chain of relations, yet consumers had little knowledge of producers and vice versa. Desire for spices helped fuel European colonial empires to create political, military and commercial networks under a single power.
Historians know a fair amount about the supply of spices in Europe during the medieval period - the origins, methods of transportation, the prices - but less about demand. Why go to such extraordinary efforts to procure expensive products from exotic lands? Still, demand was great enough to inspire the voyages of Christopher Columbus and Vasco Da Gama, launching the first fateful wave of European colonialism. . . .
So, why were spices so highly prized in Europe in the centuries from about 1000 to 1500? One widely disseminated explanation for medieval demand for spices was that they covered the taste of spoiled meat. . . . Medieval purchasers consumed meat much fresher than what the average city-dweller in the developed world of today has at hand. However, refrigeration was not available, and some hot spices have been shown to serve as an anti-bacterial agent. Salting, smoking or drying meat were other means of preservation. Most spices used in cooking began as medical ingredients, and throughout the Middle Ages spices were used as both medicines and condiments. Above all, medieval recipes involve the combination of medical and culinary lore in order to balance food's humeral properties and prevent disease. Most spices were hot and dry and so appropriate in sauces to counteract the moist and wet properties supposedly possessed by most meat and fish. . . .
Where spices came from was known in a vague sense centuries before the voyages of Columbus. Just how vague may be judged by looking at medieval world maps . . . To the medieval European imagination, the East was exotic and alluring. Medieval maps often placed India close to the so-called Earthly Paradise, the Garden of Eden described in the Bible.
Geographical knowledge has a lot to do with the perceptions of spices’ relative scarcity and the reasons for their high prices. An example of the varying notions of scarcity is the conflicting information about how pepper is harvested. As far back as the 7th century Europeans thought that pepper in India grew on trees "guarded" by serpents that would bite and poison anyone who attempted to gather the fruit. The only way to harvest pepper was to burn the trees, which would drive the snakes underground. Of course, this bit of lore would explain the shriveled black peppercorns, but not white, pink or other colors.
Spices never had the enduring allure or power of gold and silver or the commercial potential of new products such as tobacco, indigo or sugar. But the taste for spices did continue for a while beyond the Middle Ages. As late as the 17th century, the English and the Dutch were struggling for control of the Spice Islands: Dutch New Amsterdam, or New York, was exchanged by the British for one of the Moluccan Islands where nutmeg was grown. In the context of the passage, which one of the following conclusions CANNOT be reached?

Common Description: Instructions [9 - 12]
The passage below is accompanied by a set of questions. Choose the best answer to each question.
The sleights of hand that conflate consumption with virtue are a central theme in A Thirst for Empire, a sweeping and richly detailed history of tea by the historian Erika Rappaport. How did tea evolve from an obscure “China drink” to a universal beverage imbued with civilising properties? The answer, in brief, revolves around this conflation, not only by profit-motivated marketers but by a wide variety of interest groups. While abundant historical records have allowed the study of how tea itself moved from east to west, Rappaport is focused on the movement of the idea of tea to suit particular purposes.
Beginning in the 1700s, the temperance movement advocated for tea as a pleasure that cheered but did not inebriate, and industrialists soon borrowed this moral argument in advancing their case for free trade in tea (and hence more open markets for their textiles). Factory owners joined in, compelled by the cause of a sober workforce, while Christian missionaries discovered that tea “would soothe any colonial encounter”. During the Second World War, tea service was presented as a social and patriotic activity that uplifted soldiers and calmed refugees.
But it was tea’s consumer-directed marketing by importers and retailers - and later by brands - that most closely portends current trade debates. An early version of the “farm to table” movement was sparked by anti-Chinese sentiment and concerns over trade deficits, as well as by the reality and threat of adulterated tea containing dirt and hedge clippings. Lipton was soon advertising “from the Garden to Tea Cup” supply chains originating in British India and supervised by “educated Englishmen”. While tea marketing always presented direct consumer benefits (health, energy, relaxation), tea drinkers were also assured that they were participating in a larger noble project that advanced the causes of family, nation and civilization. . . .
Rappaport’s treatment of her subject is refreshingly apolitical. Indeed, it is a virtue that readers will be unable to guess her political orientation: both the miracle of markets and capitalism’s dark underbelly are evident in tea’s complex story, as are the complicated effects of British colonialism. . . . Commodity histories are now themselves commodities: recent works investigate cotton, salt, cod, sugar, chocolate, paper and milk. And morality marketing is now a commodity as well, applied to food, “fair trade” apparel and eco-tourism. Yet tea is, Rappaport makes clear, a world apart - an astonishing success story in which tea marketers not only succeeded in conveying a sense of moral elevation to the consumer but also arguably did advance the cause of civilisation and community.
I have been offered tea at a British garden party, a Bedouin campfire, a Turkish carpet shop and a Japanese chashitsu, to name a few settings. In each case the offering was more an idea - friendship, community, respect - than a drink, and in each case the idea then created a reality. It is not a stretch to say that tea marketers have advanced the particularly noble cause of human dialogue and friendship. This book review argues that, according to Rappaport, tea is unlike other “morality” products because it: