The setting of a story effects the storys plot.

In this question, three things are to be considered.

1. affect vs effect ( Affect is a verb that means influence; effect is a noun meaning result)

2. possessive form of "story" ( the correct possessive for story is story's, ie singular possessive )

3. plot vs plots ( here, one story is considered so 'plot' will be used instead of 'plots')

Hence, the correct option is (D) affects the story’s plot.

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