Vertical scale-up is correct because the scenario describes upgrading a single Amazon EC2 instance to a larger instance class with more vCPUs and memory rather than adding more instances.

The team is increasing the compute and memory capacity of one server so they are performing a vertical scale up. Vertical scale-up raises the resource limits of a single node and it is commonly used when an application cannot be easily distributed or when a larger instance delivers the needed performance improvements.

Horizontal scaling is incorrect because that approach adds more instances to share load rather than making one instance bigger.

AWS Auto Scaling is incorrect because it is a service that automates scaling actions and it usually implements scaling policies across multiple instances rather than being the directional strategy described.

Loose coupling is incorrect because it is an architectural principle that improves resilience and flexibility and it does not refer to increasing compute resources on a single server.

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