This is an interview question, so the usual bounds apply.
One array has size n and n elements. Second array has size n+m and m elements. Both the arrays are sorted. The question is to move all n+m elements into the second array in a sorted order. O(N) is desired.
There's no mention of not being able to use extra space, but going by the question, it doesn't seem to allow for additional space.
We can simultaneously walk the two arrays (a la Merge Sort) and combine them, but that would need an extra array or extra complexity of moving existing elements down by 1 (which would mean O(N2)).
Update: Here's an example.
Array1: {2, 4, 6, 10}
Array2: {21, 23, 25, , , , }
Answer: {2, 4, 6, 10, 21, 23, 25}