In economic terms, what does "expansion" refer to?

In economic terms, "expansion" refers to a phase within the business cycle characterized by an increase in business activity and overall economic growth, which is often measured by a rise in Gross Domestic Product (GDP). During an expansion, indicators such as employment rates, consumer spending, and production levels generally improve. This phase can lead to increased confidence among businesses and consumers, resulting in more investments and spending in the economy.

As the economy expands, businesses tend to produce more goods and services to meet higher demand, leading to job creation and potentially rising wages. This positive feedback loop contributes to a robust economic environment where investment opportunities abound and consumers feel more financially secure to make purchases.