Final answer:
The induced current in the loop of wire, caused by a downward-moving magnet with its north pole first, flows in a counterclockwise direction, according to Lenz's Law and the right-hand rule.
The correct option is 2) The induced current in the loop flows in the counterclockwise direction.
Step-by-step explanation:
When a bar magnet with its north pole pointing downward is dropped through a loop of wire, an induced current is generated in the loop as a result of the changing magnetic flux. According to Lenz's Law, the direction of the induced current is such that it creates a magnetic field to oppose the motion of the magnet.
Since the north pole of the magnet is moving toward the loop, the loop's own magnetic field must be directed to counter this - essentially creating a north pole on the face of the loop nearest to the magnet. By using the right-hand rule (RHR-2), with your thumb pointing toward the approaching north pole, your fingers will wrap around in a counterclockwise fashion as viewed from the magnet.
Therefore, the induced current in the loop flows in a counterclockwise direction.
The correct option is 2) The induced current in the loop flows in the counterclockwise direction.