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How can voltage be induced in a loop of wire?

Answer
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Hint: The concept of induced EMF involves generating a voltage by changing the magnetic field that passes through a coil of wire. This principle was first put to a front by Faraday. Faraday stated that, we can induce a voltage into a conductor by either passing it through a magnetic field, or moving the magnetic field past the conductor and if this conductor is part of a closed (loop) circuit, then a current will flow.

Complete answer:
To confirm this, let us perform a simple experiment.
First, we will connect a coil of wire to a galvanometer, which is a very sensitive current measuring device. We shall not connect any power supply to the circuit , so initially the current in the circuit will be zero. Now, as we bring a magnet close to the circuit, we shall notice two things:
Case (1):
If the magnet is held stationary, in or near the coil, no current will flow through the circuit which means no EMF will be induced in the circuit.
Case (2):
If the magnet is moved near the circuit, the needle of the galvanometer deflects. This shows that current is flowing through the coil. When the magnet is moved into the coil, the needle deflects in one way and when the magnet is moved away from the coil, the needle deflects in the opposite direction. This proves that the direction of current in the loop is governed by the direction in which the magnet is being moved.
In the above experiment, if we had kept the magnet stationary and moved the conductor, we would have obtained similar results.
Hence, we can now observe from the above experiment, that voltage can be induced in a loop of wire by changing the magnetic field around it.

Note:
The direction of current in the loop can be determined by using clock-rule. It states if the North face of the magnet is moved towards the loop, the direction of induced current is anti-clockwise and if the South face of the magnet is moved towards the loop, the direction of induced current is clockwise. We should also note that voltage is induced in the loop only when one of the two, that is, the conductor and the magnet is moving relative to the other.