Assuming that this is a JAR ATPL question then the logic that the examiner is looking for is as follows:
FLAP SETTING
The Climb Limited Take-Off Mass (WAT Limit) is the maximum mass at which the aircraft can achieve the minimum legal climb gradient.
So to increase WAT Limit we must increase the climb gradient that can be achieved at any given mass.
Climb gradient at any given mass is maximum with zero flap.
So reducing flap angle will increase climb gradient and increase WAT Limit.
INCREASED V2
Climb angle is maximum when flying at VX and for jets VX is VMD.
VMD is greater than V2, so if we increase V2 we will be climbing at a speed that is closer to VX.
So if we increase V2 such that it is closer to VX we will achieve a greater climb gradient at any given mass.
This will increase our WAT Limit.
You should be able to demonstrate these effects by using the various graphs at fig 4.4, fig 4.5 and fig 4.15 and fig 4.16 in the CAP 698.