What happens when acetone reacts with hydroxylamine followed by reduction? 

Isopropylamine is produced

The correct answer is option 2. Isopropylamine is produced.

When acetone reacts with hydroxylamine, it forms an oxime. Subsequent reduction of this oxime typically produces an amine.

Acetone reacts with hydroxylamine to form acetoxime. Acetoxime and a reducing agent (e.g., hydrogen gas in the presence of a metal catalyst or other suitable reducing agents like lithium aluminium hydride). The reduction of acetoxime typically converts the \( \text{C=N} \) bond to a \( \text{C-NH} \) bond, producing isopropylamine.

The correct sequence of reactions is: Acetone reacts with hydroxylamine to form acetoxime. Acetoxime is then reduced to form isopropylamine.