Complete the sentence by choosing the most appropriate pair of words: "The policy on foreign direct investment in multi brand retail may be _______ in a political impasse, but big retail chains are using India as a sourcing base and making an _________ on local businesses." Which option correctly fills the blanks?

Introduction / Context:
This is a double blank sentence completion question. It tests vocabulary, collocation, and the ability to choose the correct word based on both meaning and grammatical usage. The sentence discusses a policy on foreign direct investment in multi brand retail and its political and economic consequences.

Given Data / Assumptions:

• The sentence to complete is: The policy on foreign direct investment in multi brand retail may be _______ in a political impasse, but big retail chains are using India as a sourcing base and making an _________ on local businesses.
• Option A: Caught, impact.
• Option B: Caught, effect.
• Option C: Fetched, affect.
• Option D: Fetching, impact.
• We need both semantic correctness and standard English collocations.

Concept / Approach:
We analyse both blanks separately and also check the natural collocation of words in standard English. A policy can be caught in an impasse, which is a common phrase. For the second blank, the usual fixed expression is make an impact on something, not make an effect on something. Additionally, we must distinguish between effect (noun) and affect (verb) and between caught (past participle of catch) and fetched or fetching, which have different typical uses.

Step-by-Step Solution:
Step 1: First blank. The phrase caught in a political impasse is idiomatic and describes a situation where progress is blocked. Neither fetched in a political impasse nor fetching in a political impasse is standard usage.Step 2: Therefore, the first word must be caught.Step 3: Second blank. The expression making an impact on local businesses is a common collocation meaning having a strong influence or effect.Step 4: The phrase making an effect is uncommon and awkward, even though effect is a noun. Making an affect is grammatically incorrect because affect is usually a verb.Step 5: So, impact is the correct choice for the second blank.Step 6: Combining these, the best pair is caught and impact, which corresponds to option A.

Verification / Alternative check:
Insert the chosen words into the sentence and read it: The policy on foreign direct investment in multi brand retail may be caught in a political impasse, but big retail chains are using India as a sourcing base and making an impact on local businesses. The sentence is smooth, idiomatic, and conveys a clear, natural meaning.

Why Other Options Are Wrong:
Option B uses effect after making an, but making an effect is not standard phrasing. Option C introduces fetched in a political impasse, which is semantically wrong, and affect as a noun. Option D uses fetching, which means attractive or charming, and does not make sense in the first blank. So only option A provides both correct meanings and natural collocations.

Common Pitfalls:
Students may be tempted by effect because they know it is related to impact, but ignore the collocation make an impact. Confusion between affect and effect is also common; affect is usually a verb, while effect is a noun. Paying attention to standard phrases and idioms in English helps to avoid such mistakes.

Final Answer:
The pair that correctly completes the sentence is Caught, impact.