The correct answer is Compute Engine Autoscaler. This GCP service is specifically designed to automatically adjust the number of virtual machine instances based on criteria you define, such as CPU utilization or load balancing capacity. Unlike Cloud SQL, a managed relational database service, or Cloud Pub/Sub, a messaging and streaming data service, Compute Engine Autoscaler directly supports the scaling of VM instances. Cloud Spanner, while offering horizontal scalability for relational databases, does not provide VM instance auto-scaling. Therefore, Compute Engine Autoscaler is the appropriate choice for dynamically scaling VM instances in GCP.