What describes the cyclical pattern of economic growth and decline?

The correct answer is the term that best describes the cyclical pattern of economic growth and decline is the Business Cycle. The Business Cycle encompasses the fluctuations in economic activity that an economy experiences over a period, typically characterized by phases of expansion and contraction.

During the expansion phase, the economy grows as indicators such as employment rates and consumer spending increase. Conversely, during the contraction phase—or economic downturn—economic activity slows, leading to declining GDP, increasing unemployment, and falling consumer confidence. This cyclical nature is essential for understanding how economies function and respond to various factors, including fiscal policies, consumer behavior, and global events.

Other options, while related, do not encapsulate the entire cyclical pattern of economic fluctuations. An Economic Downturn specifically refers to the phase of decline rather than the complete cycle. The Prosperity Business Cycle is a less commonly used phrase that does not encapsulate all phases of economic activity, and Market Trends typically refer to more specific patterns within sectors or industries rather than the broad dynamics of economic growth and decline.