Final answer:
The story 'The Sky is Gray' is set in Louisiana, specifically around False River. Evidence from descriptive passages in the story suggests this through mentions of the river, the gray color of the river, and a log cabin on the riverbank.
Step-by-step explanation:
The story 'The Sky is Gray' is set in Louisiana, specifically in an area around False River. The evidence that suggests this is mentioned in the descriptive passages of the story. For example, the narrator describes the dull line of woods on the other side of the river, the gray color of the river, and the log cabin on the bank of the river. These details provide clues that the story takes place in the Louisiana region around False River.