Both affect and effect can be used as nouns or as verbs, though affect is most commonly used as a verb (to act upon or influence). The effect is the result produced.

affect

(verb): Will the drought affect the price of food?

The disorder affected his ability to perform his job.

The loss affected her deeply.

(noun): Blunted affect is often a sign of depression.

(Note that the pronunciation differs when affect refers to an emotional or psychological state.)

effect:

(noun): The effect of the drug was immediate.

Many drugs have side effects.

The special effects were spectacular!

The law will go into effect next year.

A tornado watch is in effect until midnight.

(verb): Therapy is designed to effect change.

Related:

affected

(adjective): Apply the ointment to the affected area.

Her kindness is sincere, not affected.

(This last use is similar to affectation (noun): Her affectations fooled no one.)

effective

(adjective): The new policy is effective immediately.

His methods are effective.