The Computer-Adaptive Test (CAT) is exclusive to only the Quantitative Analysis and Verbal Reasoning sections of the GMAT. In short, it is an algorithm that will adapt to your ability to tackle a series of questions.
For instance, answering a hard question correctly will lead you to an even harder question. But answering it incorrectly will bring you down to an easier question.
Easier questions are worth very few points, whereas harder ones are worth a lot more.
Correctly answering an easy question won’t change your score much. But answer it wrong, and your score will drop considerably.
Conversely, get a hard question right, and your score will take a big leap upward. Get it wrong, and it won’t affect your score much.
In essence, you should keep climbing up the ladder. Answer as many harder questions right as you can to score well in the Quantitative and Verbal reasoning sections.
An important point to note – only the Quantitative Analysis and Verbal Reasoning sections contribute to your total GMAT score – out of 800. The IR and AWA sections are separately marked.