Context

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Context
This serves two purposes: 1) it sets up your point/argument by telling the reader why you're bringing up a particular source or quote, and 2) it gives the reader information to help identify the speaker or place the speaker or example in the given work. For example, a quote from Ragged Dick could be introduced in the following manner:

For Alger, education is part of the larger ideal of technological progress, a fixture of the American ideal. Mr. Whitney notes that "it was one of my books that first put me on the track of the invention, which I afterwards made. So you see, my lad, that my studious habits paid me in money" (49).

Context helps readers 1) by making the reader think "Oh yeah, now I remember that part" and 2) by letting readers better understand (and thus agree with) your argument by framing it in a manner so they can understand it. Here, it's clear that the writer wants to accentuate the idea of progress and connect it to technology. The sentence leading up to the quote does this by planting the word "technological" in the reader's mind, which is then reflected in the quote by the word "invention." By setting up your example so clearly, your argument flows logically from your example and explanation leaving the reader with a satisfied "Ahhh" as opposed to a befuddled "huh?"