Which method of treating phobias involves progressive relaxation and exposure to the feared object (either actual or imagined?

The correct answer is systematic desensitization.

When you have a phobia of a particular thing, let's say insects, you are extremely afraid of them and cannot stand to be anywhere near them. One of the ways to get rid of your phobia is to be exposed to those insects in order to become desensitized to them so much that you won't be afraid of them anymore.