The correct answer is D) thermal efficiency will increase. Increasing the compression ratio in a diesel engine leads to higher thermal efficiency. This is because a higher compression ratio allows the air-fuel mixture to be compressed to a higher pressure and temperature before ignition, which results in more complete combustion and a greater expansion of the gases during the power stroke. This increase in thermal efficiency translates to better fuel economy and engine performance. The other options are incorrect because: A) the expansion ratio is directly related to the compression ratio, so they would both increase; B) higher compression leads to faster, more complete combustion; and C) higher thermal efficiency is the result of increased compression ratio, not a decrease.