Final answer:
The statement is true; a larger inner diameter leads to increased flow area, decreased fluid velocity, and decreased head loss, while a smaller diameter has the opposite effects.
Step-by-step explanation:
The statement provided is true. When the inner diameter of a pipe is made larger, the flow area increases, leading to a decrease in fluid velocity and head loss for a given capacity. This is because the equation of continuity dictates that for an incompressible fluid, the product of cross-sectional area and velocity must remain constant. Thus, an increase in diameter (and therefore area) means the fluid can move slower to maintain the same flow rate. Conversely, when the inner diameter is made smaller, the flow area decreases and the fluid must move faster to maintain the same flow rate, leading to increased velocity and head loss. This principle is observed in devices like the Venturi tube, where a constriction causes a noticeable increase in fluid speed.