The correct answer is A. Vatican City.
Vatican City is the smallest state in the world by both area and population. It is an independent city-state enclaved within Rome, Italy. With an area of approximately 49 hectares (121 acres), and a population of 825, it is the smallest sovereign state in the world by both area and population.
Monaco is the second smallest state in the world by area, after Vatican City. It is located on the French Riviera in Western Europe. Monaco has a population of 38,742 (as of January 2023), of which 56% are Monegasques and 44% are foreigners.
Nauru is the third smallest state in the world by area, after Vatican City and Monaco. It is an island country in Micronesia in the Pacific Ocean. Nauru has a population of 10,670 (as of January 2023).
Liechtenstein is the fourth smallest state in the world by area, after Vatican City, Monaco, and Nauru. It is a landlocked country in Central Europe. Liechtenstein has a population of 39,399 (as of January 2023).