Current flows in loop 2, and this current flows counterclockwise around loop 2.
Work Step by Step
By the right hand rule, the current flowing clockwise in loop 1 produces a magnetic field directed to the left. When the current in loop 1 increases, the magnetic flux through loop 2 increases toward the left. According to Lenz's law, the induced current in loop 2 will produce a magnetic field directed toward the right. By the right hand rule, this current must flow counterclockwise around loop 2.