During which phase of the business cycle do expansions typically occur?

Expansions in the business cycle refer to periods of increase in economic activity, characterized by rising GDP, employment, and consumer spending. The correct phase during which expansions typically occur is the recovery phase, following a recession.

During the recovery phase, economic indicators begin to improve as businesses start investing again, leading to job creation and an increase in consumer confidence and spending. This is a time when the economy transitions from a downturn to a growth phase, setting the stage for broader expansion.

Expansion does not occur during a peak, as this is the stage where economic activity has reached its highest point before beginning to decline. Understanding this distinction is vital for recognizing the various phases of the business cycle and their implications for businesses and policymakers.