It can be inferred from the passage that Freud believed that in fairy tales, "nothing is incredible" (line 24) becaus...

Emil-Kunkin on February 8 at 03:42AM

It seems that Freud excluded fairytales because they are so unreal that the concept of uncanny doesn't apply. The uncanny requires some break with the familiar, with the rules of the game as we see them. However, in fairy tales, the rules are thrown out. This is a good match for c. There are no established rules in fairy tale, so how could we have the uncanny which requires a set of rules. Merely being purely imaginary doesn't provide this. All fiction is imaginary to at least some extent and a purely imagined world does not have to break all the rules.