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These levels are not clearly defined and different people will use different systems. In the case of our texts, we use the classification given by the exam board. In our Members' Area, we have a new tool (http://www.usingenglish.com/members/text-analysis/) that grades texts by lexis according to a couple of different methods.
Often, I think people will simply judge from experience and think which levels of their students could cope with a text and the exercises.
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Reading comprehension text level 
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