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"It is unclear what stepped up sanctions against the North Korea would look like." (CNN.)

I think that the sentence above is a cleft one and what stepped up sanctions against the North Korea would look like an indirect question.

Am I right?

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Yes.

"stepped-up" should be hyphenated.

"against the North Korea" should be "against North Korea".

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anonymousI think that the sentence above is a cleft one

Not at all. That would be something like sentence (2) below, derived from (1). All clefts are of the form It is/was [highlighted element] that ....

(1) The form of such sanctions is unclear.
(2) It is [the form of such sanctions] that is unclear.

What you have is a sentence with a dummy 'it' which takes the place of the entire interrogative clause (indirect question).

What stepped-up ... would look like | is unclear.

anonymouswhat stepped-up sanctions against the North Korea would look like an indirect question

Correct.

CJ

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I have trouble seeing this as an indirect question.

What if I said this? I don't see a question involved at all.

eg I know what stepped-up sanctions against North Korea would look like.

or

eg What stepped-up sanctions against North Korea would look like is easy to understand.

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It is unclear what stepped-up sanctions against North Korea would look like.

No: it’s not a cleft, but an extraposition construction where the underlined interrogative content clause (indirect question) has been extraposed to the end of the sentence and replaced by the dummy subject “it”. The basic version would be

What stepped-up sanctions against North Korea would look like is unclear

where the meaning is “The answer to the question ‘What would stepped-up sanctions against North Korea look like?’ is unclear.”

The dummy element "it" serves the syntactic purpose of filling the subject position The extraposed element doesn’t give the meaning (reference) of “it” but serves simply as a semantic argument of the verb phrase.

Comments  
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I was thinking along these lines:

What would stepped up sanctions against the North Korea look like? That's unclear.

CJ

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Thank you for the replies.

 BillJ's reply was promoted to an answer.
CalifJimNot at all.

OK well I stand corrected then.

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