The correct answer is: Both I and II follow.
The statement says that a very large number of students have failed in the final high school examination due to faulty questions in one of the subjects. This means that the students who failed did not have a fair chance to pass the exam, and so it is unfair to simply fail them. Therefore, course of action I, which states that all the students who have failed in the subject should be allowed to take supplementary examination, follows.
The statement also says that the failure was due to faulty questions. This means that someone made a mistake, and so it is important to find out who was responsible and to take action to prevent similar mistakes from happening in the future. Therefore, course of action II, which states that all those who are responsible for the error should be suspended and an enquiry should be initiated to find out the facts, follows.
In conclusion, both course of action I and course of action II follow from the statement.