If I place a closed loop of wire between the North and South Poles of two magnets, if I get electricity, this means I get infinite energy forever by doing nothing. How is this violation of the law of conservation of energy possible.

This is an exceptional case

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The given statement is wrong. The magnets have to be moving with respect to the coil.

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Faraday was wrong.

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Excess energy dissipates into the air as heat.

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Solution

The correct option is B The given statement is wrong. The magnets have to be moving with respect to the coil.
The question tries to trick you. The magnets have to be moving continuously to produce electricity in the coil. This does not violate energy conservation as work needs to be done to move the magnets. That work done is converted to electrical energy in the coil.

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