What does "expansion" refer to in the context of the economy?

In the context of the economy, "expansion" refers to a period of continued growth, which often manifests through increased sales and rising home prices. During an economic expansion, consumer confidence typically improves, leading to increased consumer spending, business investment, and overall economic activity. This growth is characterized by higher levels of production and employment, contributing to a robust economic environment.

When sales and home prices grow, it indicates that demand is strong and that the economy is on an upward trajectory, which is the essence of an expansion phase. In contrast, options that mention decreased consumer spending, high vacancy rates, or market saturation describe conditions that result from economic contraction or stagnation, where growth is typically slowing or declining. Hence, focusing on continued growth aligns perfectly with the concept of economic expansion.