The answer is overactive sebaceous glands. Milady states plainly that oily scalp and hair is most often caused by overactive sebaceous glands — the oil-producing glands attached to the hair follicle — though diet and hygiene can be contributing factors too.
Notice the answer is the opposite of one of the wrong choices: inactive oil glands would produce a dry scalp, not an oily one. Malassezia, a yeast-like fungus, is associated with dandruff rather than oiliness specifically, and poor circulation isn't the textbook's stated cause here.
Milady Standard Barbering, 6th ed., Ch. 11 (Treatment of the Hair and Scalp), p. 284: "Oily scalp and hair is most often caused by overactive sebaceous glands; however, an improper diet or lack of hygienic practices can be contributing factors as well."
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