Which phase does NOT belong to the business cycle?

The phase that does not belong to the business cycle is stability. The business cycle is typically characterized by four main phases: expansion, peak, contraction, and trough.

During the expansion phase, the economy grows as measured by increases in GDP, employment rates rise, and consumer spending increases. The peak phase marks the point where economic growth reaches its highest point before transitioning into a contraction phase. Contraction, or recession, indicates a decline in economic activity, where GDP contracts, and unemployment tends to rise.

While stability might suggest a lack of significant change in the economy, it is not formally recognized as a phase of the business cycle itself. The business cycle is primarily concerned with fluctuations in economic activity rather than periods of stability, which can be seen as a temporary state or a period that exists between the more dynamic phases of expansion and contraction. Thus, stability is not included as an official phase in the analysis of business cycles.