The correct option is B 0 A, 2 V
The circuit is connected as mentioned in the diagram and the two cases where the key is open and the key closed are considered.
(i) When the key K is open:
The potential difference between the terminals of a battery will equal the emf of the battery when there is no current in the battery. At this time, the current though, and hence the potential drop across the internal resistance is zero. This only happens when there is no load placed on the battery. So, when the circuit is open, no current flows. So there is no internal voltage drop, and the full voltage appears across the source's terminals.
Hence, the voltmeter will show 2 volts, that is equal to the emf of the cell and the ammeter shows 0 as there is no current flowing through the circuit.