Increased internal resistance reduces current and terminal voltage

Steps:

• The circuit's total resistance is external R plus internal r; increasing r raises total resistance.
• Current I = ε / (R + r) decreases as r increases, with ε constant.
• Ammeter measures I, so its reading decreases.
• Voltmeter measures terminal voltage V = I R across the fixed resistor; V decreases as I decreases.

Why A is correct:

• From Kirchhoff's voltage law, V = ε - I r; higher r lowers I more than enough to reduce V, as I drops proportionally to 1/(R + r).

Why the others are wrong:

• B: Voltmeter reading decreases because V = I R and I falls.
• C: Ammeter reading decreases because total resistance rises.
• D: Both readings change due to altered current from higher r.

Final answer: A