Which option describes a distinct phase within the business cycle where economic activity is generally improving?

The phase where economic activity is generally improving is referred to as expansion. During this period, key indicators such as GDP, employment levels, and consumer spending tend to rise, signaling positive momentum in the economy. Businesses often experience increased production, higher sales, and greater profitability, which in turn leads to more investment in capital and human resources.

This period of growth is characterized by increased consumer confidence and spending, alongside a boost in job creation. As expansion progresses, economic activity spreads, leading to further investments and a generally favorable economic climate. This growth phase is often seen after a recession, as the economy rebounds and moves towards more robust levels of productivity and performance.

The other phases such as recession, contraction, and stagnation do not reflect improvement in economic activity; instead, they indicate declining or stagnant growth, which contrasts the positive characteristics of an expansion.