Correct answer: (2) increases

An atom is the fundamental building block of matter.  It has smaller components called subatomic particles which are the: proton, neutron and electron.

The proton and neutron are both found in the center of the atom called the nucleus.  The former has a positive charge while the latter has no charge.  On the other hand, the negatively-charged electron is found in orbitals while circling around the nucleus.  The electron's lowest possible energy is called the ground state in which this is the normal energy level.

Answering the question:

When energy decreases from one orbital to another, the movement of the electron is from an excited state to its ground state, thus, eliminating option no. 1.  When there is no change in the energy level, the state of the atom remains unchanged.  There will be no excitation stage expected which makes option no. 3 invalid.

When an electron receives and absorbs extra energy from heat, light or even from a collision with a nearby atom or particle, it moves to a higher orbital with higher energy level.  This higher orbital is now the electron's excited state.  For this underlying concept, option no. 2 is the correct answer for the question.