The red outlines show the lungs and the outer grey line shows the chest wall. The cavity inside the chest wall is the thoracic cavity. The diaphragm is at the bottom of the thoracic cavity. Red indicates that the diaphragm is contracting.

When the diaphragm contracts, the thoracic cavity increases in volume and inflates the lungs. This process is inspiration. The volume of gas inside the lungs is called 'lung volume'. With diaphragm contraction, the lung volume increases.

Although not illustrated, muscles such as intercostal muscles in the chest wall, are also important inspiratory muscles.

When 1 [ A inspiratory muscles / B expiratory muscles ] such as the diaphragm contract, the lungs and the thoracic cavity 2 [ A increases / B decreases ] in volume.
The lungs and thoracic cavity 3 [ A increase in volume during inspiration and decrease in volume during expiration / B increase in volume during expiration and decrease in volume during inspiration].

1 [ A inspiratory muscles ]
2 [ A increases ]
3 [ A increase in volume during inspiration and decrease in volume during expiration ]