1. Balloon will expand.
This is because when the temperature is higher, the particles of matter gain more heat energy, this heat energy is converted into the kinetic energy of particles. So, they move more rapidly in all directions, increasing the volume.
2. Balloon will contract.
This is because when the temperature is lower, the particles of matter lose more heat energy to their surroundings, this heat energy is converted from the kinetic energy of particles. It means they lose kinetic energy. So, they move less rapidly in all directions, decreasing the volume.