This is a favourite of the GMAT examiners - they will give you a word which is similar in meaning to the one which you are supposed to use but slightly different. The words won't be suitable substitutes for each other - i.e. the option that they give you will be ungrammatical. Here are some common examples - you will, no doubt, be able to find more!
Practice vs. Practise
These words sound alike and are spelled similarly - they differ only by one letter. They have a variety of meanings (to practise an instrument, a profession; a doctor's practice etc.) but there is one golden rule:
The word practise with an S is a verb, whereas the word practice with a C is a noun.
For example: I practise the piano (verb), but I did my piano practice (noun). The doctor practised for twenty years (verb), but his brother, the solicitor, had a practice that lasted over thirty years.
Another pair of words that functions exactly the same way is advise (the verb) and advice (the noun).
Affect vs. Effect
Ah, this old chestnut! I have seen these crop up again and again in GMAT tests. Both the words affect and effect can be nouns, and both can be verbs. Just to confuse the issue, they are both pronounced the same. Here, I have summarised the rule in the form of a table:
Verb
Noun
Affect
To influence, alter something
see below
Effect
To bring something about, make it happen
A change, alteration, influence
The term affect used as a noun (i.e. an affect) is a psychological term which is way beyond the scope of GMAT. As far as you are concerned, you can think of affect as being a verb only!
So, we have a course of action affecting something, in which case it produces an effect. If it effects something, then it will make it happen or bring it about. Here are some grammatically correct examples:
The death of his wife affected him very deeply.
If you do not effect an immediate improvement in your behaviour, I will have to punish you.
The effect of his speech was to inspire the workforce with enthusiasm.
How do you think the bad news will affect the students? I don't know what effect it will have on them!
Lay vs. Lie
This is one which people are always getting wrong. The number of times I have heard people say "lay" on the Jerry Springer Show when they should be saying "lie" ... !
Again, lie can be a verb and a noun.
Lay can only be a verb.
The past tense of lay is laid. The present participle is laying.
The past tense of lie (the verb) is lied.The present participle is lying.
Here is another table, similar to the one for affect and effect, explaining the meaning. Note that some of the words have several meanings:
Verb
Noun
Lay
To put something down.
To lay a table, an egg.
Lie
To tell untruths (lies)
To rest, to lie down
An untruth, a fib
Here are the obligatory examples:
The suspect lied to the police when they questioned him.
When I saw him, he was lying on his bed.
We laid the table and then started to cook the meal.
They gently laid the injured dog on the ground.
The hen lays at least three eggs every day.
Pedantic word choices
These are rather petty-minded distinctions between words, but I have seen them appear in GMAT questions and practice papers, so you should really know about them.
Hanged vs. Hung
These are both valid past tenses for the verb to hang. However, hanged only refers to people (i.e. an execution by hanging!) and hung refers to everything else (i.e. hanging a picture, curtains etc.)
Look vs. Appear
Many people use the word look where they mean appear. Look is what you do with your eyes - means a glance, or the act of seeing. On the other hand, appear means to seem or have an outward appearance.
For example, when your significant other comes into the room with a completely new set of clothes on and says "How do I look?", the correct answer is actually "Well, you use your eyes, don't you?" What I suspect he/she means is "How do I appear?" in which case the correct answer is "very nice" (or "awful" depending on the clothes).
Healthy vs. Healthful
Food cannot be healthy. People are healthy (or unhealthy). Food is described as healthful if it tends to make the person who eats it healthy (e.g. fruit, vegetables, fish) or unhealthful if it tends to make the person unhealthy (e.g. burger and chips). This is a petty distinction, but it can mean the difference between getting a question right and getting it wrong.
Uninterested vs. Disinterested
A person is uninterested in something if he or she is bored with it, i.e. has no interest in the subject. A person is disinterested in something if they have no particular reason to approve or disapprove of it - i.e. they are completely neutral in their opinion of it. Another word for disinterested is impartial.