Dreaming occurs when the cerebral cortex synthesizes neural signals generated from activity in the lower brain.
1. the activation-synthesis theory
2. Freud's psychoanalytic theory
3. the cognitive theory of dreaming
4. circadian theory

The correct answer is option 1. The activation-synthesis theory

Explanation:

The activation-synthesis theory of dreams is an explanation for the development of dreams neurologically. According to this theory, dreaming occurs when the cerebral cortex synthesizes neural signals generated from activity in the lower brain. It makes sense of the activity happening in other parts of brain during sleep.

Therefore the correct answer is the activation-synthesis theory.