The device that operates using the magnetic effect of electric current is

The magnetic effect of an electric current is the fact that a current-carrying conductor produces a magnetic field around itself. When the conductor is wound into a coil around a soft-iron core, the arrangement becomes an electromagnet, which attracts iron only while current flows. Any device that works by this principle must contain a coil whose magnetism does mechanical work.

The electric bell is exactly that device. Current from the supply passes through the coils of an electromagnet, which attracts a soft-iron armature carrying a hammer, and the hammer strikes the gong. The movement of the armature breaks the circuit at a contact screw, the electromagnet loses its magnetism, a spring pulls the armature back and remakes the contact, and the cycle repeats rapidly to give continuous ringing. Remove the magnetic effect of the current and nothing at all happens, so the bell is the device that operates on it.

The alternatives depend on different effects. A rheostat is simply a variable resistor used to control current by changing resistance, and it uses the heating effect at most, not magnetism. A thermostat relies on the differential thermal expansion of a bimetallic strip, which bends with temperature and opens or closes a circuit. A carbon microphone works because the resistance of loosely packed carbon granules changes as sound waves compress them, so it converts sound into a varying current through a resistance change, not through magnetism. When a question asks which device uses a named effect, look for the component that produces it: a soft-iron core with a winding signals the magnetic effect, a bimetallic strip signals expansion, and a resistance wire signals the heating effect.