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Situated at an elevation of 1,350m, the city of Kathmandu, which looks out on the sparkling Himalayas, enjoys a warm climate year-round that makes living there pleasant.

What does year-round modify? Does it modify the verb enjoy or the phrase a warm climate? Could you help me clarify it? Thank you always.

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Yes, the word year-round is an adverb (it can also be used as an adjective, by the way) which modifies the verb enjoys. It tells you how the city of Kathmandu enjoys its warm climate—it does that all year long. Meaning, the place has warm weather conditions throughout the entire year which is what, according to the person who wrote this passage, makes living there such a pleasant experience.

You should remember that in English adverbs can only modify verbs (she talks loudly), adjectives (he is very tall.) and other adverbs (the show ended too quickly). They never modify nouns, compound nouns or noun phases. So, locutions such as beautifully girl or largely house don't really make a whole lot of sense. In your case, a warm climate is a compound noun. Therefore, the adverb year-round can't possibly modify it. The verb enjoy is the only thing there that it can go with.

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Year-round in this sentence is used as an adverb to describe how the warm climate is enjoyed. It works to modify or add information to the verb enjoy (says how it's enjoyed).

often the phrase year-round acts as an adjective and usually precedes the noun it modifies.

e.g. A year-round resort.

e.g. Cricket is a year-round spot in India.

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It means that the city enjoys a warm climate that lasts the whole year.

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