What term describes the economic cycle of expansion followed by contraction?

The term that describes the economic cycle of expansion followed by contraction is the Business Cycle. This concept refers to the fluctuations in economic activity that occur over time, which can be characterized by periods of economic growth (expansion) and periods of decline (contraction). During the expansion phase, indicators such as employment, consumer spending, and production tend to increase, leading to overall economic growth. Conversely, during the contraction phase, these indicators decline, often resulting in slowdowns, recessions, or depressions.

Understanding the Business Cycle is crucial for businesses, policymakers, and investors as it helps them make informed decisions regarding investments, resource allocation, and strategies for growth or risk management during various phases of the economy.