Right choice is (b) 2^N
To explain: The initial state of the DFA constructed from this NFA is the set of all NFA states that are reachable from state 1 by ε-moves; that is, it is the set {1, 2, and 3}. A transition from states1, 2, and 3 by input symbol 0 must follow either the arrow from state 1 to 2, or from state 3 to 4. Also, neither state 2 nor 4 have outgoing ε-moves.