The Sun is about half a degree across on the sky. This is true whether it is high up or setting and we can verify it easily by measuring it with tools. It's also true that we perceive it bigger when it's setting than when it's near the zenith. read more
The brain thinks that objects on the horizon should be farther away than objects overhead; since the Sun is the same apparent size in both places, the brain concludes that the Sun is physically bigger when it's on the horizon, and thus tricks you into thinking that the angular size is bigger than when it's overhead. read more