Business cycles are identified as having four distinct phases:
1. Expansion,
2. Peak,
3. Contraction, and
4. Trough.
Expansion is the phase of the business cycle when the economy moves from a trough to a peak. It is a period when the level of business activity surges and gross domestic product (GDP) expands until it reaches a peak. A period of expansion is also known as an economic recovery.
An expansion is characterized by increasing employment, economic growth, and upward pressure on prices.
