Concept:The diagonal of a rectangle inscribed in a circle equals the circle's diameter.For a fixed diagonal, the rectangle with maximum area is a square.Explanation:The circle has radius 2 units, so its diameter is 4 units.Let the rectangle have length L and breadth B. The diagonal is L2+B2​.Since the diagonal equals the diameter: L2+B2​=4.Squaring gives L2+B2=16.To maximise area A=L×B under this constraint, use symmetry or calculus.By symmetry, maximum area occurs when L=B (the rectangle becomes a square).Substituting L=B into L2+B2=16 gives 2L2=16, so L2=8.Hence L=B=8​.Thus maximum area =L×B=8​×8​=8 square units.Alternatively, using calculus: differentiate area A=LB with respect to L, use constraint to find L=B, same result.Answer:8 square units (option C).