Answer
(a) increase
(b) III
Work Step by Step
(a) We know that $I=\frac{V}{R}$. This equation shows that the current is inversely proportional to the resistance. When the switch is closed, resistor 2 is short circuited and as a result the overall resistance of the circuit decreases, thus the current in the circuit increases.
(b) The best explanation is option (III) -- that is, closing the switch shorts out the second resistor, decreases the total resistance of the circuit, and increases the current.
