The correct option is B The kinetic energy of satellite increases and the gravitational potential energy of satellite-earth system decreases;
In the circular motion around the Earth, the centripetal force on the satellite is a gravitational force. Therefore, v2=GM/R, where M is the mass of the Earth, R is the radius of the orbit of satellite and G is the universal gravitational constant.Therefore, the kinetic energy increases with the decrease in the radius of the orbit. The gravitational potential energy is negative and decreases with the decrease in radius.