If in the fraction $\frac{x}{y}$ we decrease the numerator by $40 \%$ and the denominator $y$ by $60 \%$, then the fraction $\frac{x}{y}$:
(A) decreases by $20 \%$
(B) increases by $20 \%$
(C) decreases by $50 \%$
(D) increases by $50 \%$
The correct option is (D).

If a number $x$ is decreased by $40\%$, it becomes $60\%$ of $x$, that is: $0.6 x$. Similarly, when a number $y$ is decreased by $60\%$, it becomes $0.4 y$. Therefore, the fraction $\frac{x}{y}$ becomes $\frac{0.6 x}{0.4 y}=\frac{6}{4} \frac{x}{y}=1.5 \frac{x}{y}$. This means that the fraction $\frac{x}{y}$ has increased by $50\%$ of its value.