Correct Answer - Option 2 : decrease
The efficiency of the engine decreases as the temperature of inlet air increases. As, the air becomes thinner at a higher temperature so it does not expand much so doing less work and thus, reducing engine efficiency.
The efficiency of the engine increases as the temperature of inlet air decreases, increasing the density of air. Thus, air expands more producing more work. The turbocharger and supercharger are employed for taking more air to increase engine efficiency.